Bullish sentiment remains unchanged; stay long. The E-mini Dow formed a “Doji” candle last night. It settled at 27,746 pts, after hovering between a high of 27,806 pts and low of 27,633 pts throughout the session. Technically speaking, we think the bullish sentiment stays intact, as the index continued to remain above the rising 21-day SMA line. Given that the 14-day RSI indicator climbed to a more positive reading, this would imply that the upside momentum is not yet diminished. As such, we believe buyers are still in control of the market.

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 would likely be at 26,588 pts, determined from the low of 23 Oct’s “Hammer” pattern. Towards the upside, the near-term resistance level is maintained at the 28,000-pt psychological spot. This is followed by the 28,500-pt round figure.

Hence, we advise traders to stay long, in line with our initial recommendation to have long positions above the 26,750-pt level on 16 Oct. In the meantime, a trailing-stop set below the 27,337-pt threshold is advisable in order to lock in part of the gains.

Source: RHB Securities Research - 15 Nov 2019