Maintain long positions. The E-mini Dow formed a “Doji” candle with a long lower shadow last night. It dropped to a low of 27,470 pts during the intraday session, before ending at 27,658 pts for the day. However, it is not surprising that buyers may be taking a pause following the recent gains. From a technical perspective, yesterday’s long lower shadow implied there was initial selling pressure during the day before the market moved up by the end of the trading session. This indicated the market outlook remained bullish.

As seen in the chart, the immediate support level is seen at 27,337 pts, which was obtained from the low of 6 Nov. If a breakdown arises, the next support is maintained at 26,588 pts, or the low of 23 Oct’s “Hammer” pattern. On the other hand, we are now eyeing the immediate resistance level at the 27,739-pt record high. Meanwhile, the next resistance is anticipated at the 28,000-pt psychological mark.

Therefore, we advise traders to maintain long positions, since we initially recommended initiating long above the 26,750-pt level on 16 Oct. In the meantime, a trailing-stop can be set below the 27,337-pt threshold to secure part of the profits.

Source: RHB Securities Research - 12 Nov 2019