Stay long, with a trailing-stop set below the 28,692-pt level. The upside strength of the E-mini Dow continued as expected, as a long white candle was formed last night. It surged 452 pts to close at 29,241 pts. From a technical perspective, the uptrend is likely to persist, as the index has posted a third consecutive white candle and crossed above the 29,000-pt threshold. We view yesterday’s higher close as a continuation of the buyers extending the rebound from the recent low of 31 Jan. Overall, we keep our bullish view on the E-mini Dow’s outlook.

As seen in the chart, we are now eyeing the immediate support level at the 29,000-pt psychological mark. If a breakdown occurs, look to 28,692 pts – obtained from the low of 5 Feb’s long white candle – as the next support. On the other hand, we anticipate the immediate resistance level at the 29,362-pt historical high. Meanwhile, the next resistance is seen at the 29,500-pt round figure.

Therefore, we advise traders to maintain long positions, since we had originally recommended initiating long above the 28,600-pt level on 5 Feb. For now, a trailing-stop can be set below the 28,692-pt threshold in order to limit the risk per trade.

Source: RHB Securities Research - 6 Feb 2020