Stay long, with a new trailing-stop set below the 26,588-pt level. Last night, the E-mini Dow’s upward momentum continued as expected after it ended higher to form a white candle. It rose 149 pts to close at 27,053 pts. Technically speaking, the upside move remains intact, as the index has posted a second consecutive white candle. As the E-mini Dow recorded its highest point in more than a month, this indicates the upside swing that started from 23 Oct’s “Hammer” pattern may be continuing. Overall, we keep our bullish view on the index’s outlook.

According to the daily chart, we now anticipate the immediate support level at 26,588 pts, which was obtained from the low of 23 Oct’s “Hammer” pattern. The next support is seen at 25,983 pts, ie the previous low of 10 Oct. To the upside, the immediate resistance level is now situated at the 27,397-pt historical high. Meanwhile, the next resistance will likely be at the 28,000-pt psychological spot.

Consequently, we advise traders to maintain long positions, given that we initially recommended initiating long above the 26,750-pt level on 16 Oct. In the meantime, a new trailing-stop can be set below the 26,588-pt threshold to limit the risk per trade.

Source: RHB Securities Research - 29 Oct 2019