Maintain long positions. The E-mini Dow ended lower to form a black candle last night. It dropped 100 pts to close at 29,179 pts, off the session’s high and low of 29,318 pts and 29,108 pts. However, we maintain our bullish view, as the index has continued to stay above the rising 21-day SMA line. Meanwhile, judging from the current technical landscape, as long as the E-mini Dow does not erase the gains from 14-16 Jan’s white candles, the upside swing remains in effect. As such, we believe the bulls still have control over the market.

As seen in the chart, we are now eyeing the immediate support level at the 29,000-pt psychological mark. If this level is taken out, look to 28,737 pts – ie the low of 14 Jan – as the next support. Towards the upside, we now anticipate the immediate resistance level at the 29,362-pt historical high. The next resistance is maintained 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. At the same time, a trailing-stop can be set below the 28,737-pt threshold to lock in part of the gains.

Source: RHB Securities Research - 22 Jan 2020