Positive sentiment remains unchanged; stay long. The E-mini Dow formed a white candle with a long lower shadow last night, implying that the sellers had failed to reverse the bullish sentiment. During the intraday session, it plunged to a low of 28,850 pts before pushing up to 29,245 pts at the end of the day. This is a sign that the upward momentum has not diminished yet. As shown in the chart, at last night’s close, the index managed to recover above the 29,000-pt support mentioned previously. This was after paring losses from an intraday low of 28,850 pts, which indicates that the outlook remains bullish.

Based on the daily chart, the immediate support level is maintained at the 29,000-pt psychological spot, which is also set near the midpoint of 5 Feb’s long white candle. The next support is anticipated at 28,692 pts, or the low of 5 Feb. To the upside, we are eyeing the near-term resistance level at 29,362 pts, ie 17 Jan’s high. This is followed by the 29,475-pt record high.

Therefore, we advise traders to stay long, since we initially recommended initiating long above the 28,600-pt level on 5 Feb. A trailing-stop set below the 29,000-pt mark is advisable to lock in part of the gains.

Source: RHB Securities Research - 11 Feb 2020