Positive sentiment remains unchanged; stay long. The E-mini Dow formed a positive candle with a long lower shadow last night, signalling that the sellers had failed to reverse the bullish sentiment. During the intraday session, it plunged to a low of 25,932 pts before pushing up to 26,405 pts at the end of the session. This is a sign that the buying momentum has not diminished. As shown in the chart, at last night’s close, the index managed to recover above the 26,000-pt support mentioned previously after paring losses from an intraday low of 25,932 pts. This indicates that the outlook is still positive.

Currently, we are eyeing the immediate support level at 25,932 pts, determined from the previous low of 6 May. The next support would likely be at 25,213 pts, ie the low of 8 Mar’s “Hammer” pattern. To the upside, the immediate resistance level is anticipated at 26,694 pts, obtained from the high of 24 Apr. Meanwhile, the next resistance is maintained at the 26,966-pt historical high.

Hence, we advise traders to maintain long positions, following our recommendation of initiating long above the 26,000-pt level on 2 Apr. For now, a new trailing-stop can be set below the 25,932-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 7 May 2019