Stay long while setting a trailing-stop below the 27,337-pt support. The E-mini Dow ended higher last night to form a “Doji” candle, rising by 5 pts to close at 27,663 pts – this was off the session’s high of 27,732 pts and low of 27,597 pts. On a technical basis, the upside move has not diminished yet, after the index marked a higher close above the rising 21-day SMA line. This may also further extend the rebound that began with 23 Oct’s “Hammer” pattern. Overall, we keep our bullish view on the E-mini Dow’s outlook.

Based on the daily chart, we are eyeing the immediate support level at 27,337 pts, ie the low of 6 Nov. The next support will likely be at 26,588 pts, which was determined from the low of 23 Oct’s “Hammer” pattern. Towards the upside, the immediate resistance level is seen at the 27,739-pt historical high. If a breakout arises, the next resistance is anticipated at the 28,000-pt psychological spot.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 26,750-pt level on 16 Oct. A trailing-stop can be set below the 27,337-pt mark to lock in part of the gains.

Source: RHB Securities Research - 13 Nov 2019