Stay long provided that the 29,160-pt support is not violated at the closing. The E-mini Dow formed another black candle last night. It dropped 184 pts to close at 29,211 pts, off the session’s high of 29,476 pts. Currently, we maintain our positive view, as the index has remained above the rising 10-day SMA line for two weeks. On a technical basis, as long as the 29,160-pt support mentioned previously is not violated at the closing, this shows that the upside swing is still in effect. As such, we believe that the market rebound that started in early February may persist.

As seen in the chart, we are eyeing the immediate support level at 29,160 pts, set near the low of 11 Feb. Meanwhile, the next support is maintained at the 29,000-pt round figure, also attached near the midpoint of 5 Feb’s long white candle. On the other hand, the near-term resistance level is seen at the 29,543-pt record high. This is followed by the 30,000-pt psychological spot.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 28,600-pt level on 5 Feb. A trailing-stop can be set below the 29,160-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 19 Feb 2020