Stay long while setting a trailing-stop below the 27,337-pt support. The E-mini Dow’s upward momentum continued as expected after it formed a long white candle last Friday. It rose 207 pts to close at 27,953 pts off its high of 27,971 pts and low of 27,736 pts. On a technical basis, given that the index has posted a long white candle above the rising 21-day SMA line, this implies the bullish trend remains unchanged. Last Friday’s candle sent the E-mini Dow to its new historical high – indicating that the rebound, which began with 23 Oct’s “Hammer” pattern, may carry on. Overall, we remain upbeat on the index’s outlook.

The immediate support level is currently seen at 27,337 pts, which was the low of 6 Nov. If a breakdown arises, look to 26,588 pts – ie the low of 23 Oct’s “Hammer” pattern – as the next support. To the upside, we maintain the near-term resistance level at the 28,000-pt psychological mark. This is followed by the 28,500-pt round figure.

Therefore, 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 trailing-stop can be set below the 27,337-pt mark to lock in part of the profits.

Source: RHB Securities Research - 18 Nov 2019