Stay long, with a new trailing-stop set below the 29,000-pt support. The E-mini Dow formed another black candle last night. It slipped 39 pts to close at 29,140 pts. Unsurprisingly, yesterday’s black candle can be viewed as a result of profit-taking activities following the recent surge seen during the last two weeks. From a technical viewpoint, we believe the buyers may continue to control the market as long as the index does not break below the 29,000-pt support mentioned previously. Overall, we keep our bullish view on the E-mini Dow’s outlook.

Based on the daily chart, the immediate support level is maintained at the 29,000-pt psychological spot. If a decisive breakdown arises, the next support is seen at 28,737 pts, which was determined from the low of 14 Jan. To the upside, the immediate resistance level is seen at the 29,362-pt record high. Meanwhile, the next resistance is seen at the 29,500-pt round figure.

Recall that we initially recommended traders to initiate long positions above the 28,159-pt level on 17 Dec 2019. We continue to advise them to stay long for now while setting a new trailing-stop below the 29,000-pt threshold. This is to lock in a larger part of the profits.

Source: RHB Securities Research - 23 Jan 2020