Market hit its new historical high; stay long. The E-mini Dow’s upside strength continued as expected after it ended higher and formed another white candle. It gained 87 pts to close at 29,328 pts, off its high of 29,475 pts and low of 29,186 pts. As the index has marked a higher close vis-à-vis the previous sessions since 3 Feb, this can be viewed as the bulls extending their buying momentum. Furthermore, in view that the 10-day SMA line is likely to turn upwards, this suggests that additional strength may be present in the coming sessions.

Based on the daily chart, the immediate support level is maintained at the 29,000-pt psychological spot. The next support is anticipated at 28,692 pts, ie the low of 5 Feb’s long white candle. To the upside, the immediate resistance level is seen at 29,362 pts, defined from the high of 17 Jan. If this level is taken out, the next resistance is situated at the 29,475-pt record high.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 28,600-pt level on 5 Feb. For now, a trailing-stop set below the 29,000-pt mark is advisable in order to lock in part of the gains.

Source: RHB Securities Research - 7 Feb 2020