Maintain long positions. Upward momentum in the E-mini Dow continued as expected, as another white candle was formed last night. It rose 63 pts to close at 28,934 pts after oscillating between a high of 29,015 pts and low of 28,737 pts. Technically, the index has marked a higher close vis-à-vis the previous session, which indicates the rebound that started from 8 Jan’s “Bullish Engulfing” pattern may persist. Moreover, the 14-day RSI indicator is now rising higher without being overbought, improving the bullish sentiment. Overall, we stay positive on the E-mini Dow’s outlook.

As seen in the chart, we are eyeing the immediate support level at 28,341 pts, ie near the lows of 31 Dec 2019 and 6 Jan. If a breakdown arises, look to 28,084 pts – the low of 8 Jan’s “Bullish Engulfing” pattern – as the next support. To the upside, the immediate resistance level is anticipated at the 29,022-pt record high. Meanwhile, the next resistance will likely be at the 29,500-pt round figure.

Hence, 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 28,084-pt mark to minimise the downside risk.

Source: RHB Securities Research - 15 Jan 2020