Positive sentiment remains unchanged; stay long. The E-mini Dow formed a white candle with a long lower shadow last night, signalling the sellers’ failure to reverse the bullish sentiment. During the intraday session, it plunged to a low of 28,084 pts before pushing up to 28,770 pts at the end of the session – a sign that the buying momentum has not diminished. As shown in the chart, at last night’s close, the index managed to recover above the 28,341-pt support mentioned previously – this was after paring losses from an intraday low of 28,084 pts, which indicates that the outlook remains positive. As seen in the chart, we maintain the immediate support level at 28,341 pts, ie near the lows of 31 Dec 2019 and 6 Jan. Meanwhile, the next support is now anticipated at 28,084 pts, which was the low of 8 Jan. Towards the upside, we are eyeing the near-term resistance level at the 28,893-pt record high. This is followed by the 29,000- pt psychological spot. Therefore, we advise traders to stay long, following our recommendation of initiating long above the 28,159-pt level on 17 Dec 2019. A trailing-stop can be set below the 28,341-pt mark to limit the downside risk.

Source: RHB Securities Research - 9 Jan 2020