Stay long, with a trailing-stop set below the 20,510-pt level. The E-mini Dow’s upside move continued as expected, as a third consecutive white candle was formed last night. This indicated persistent buying momentum. It surged 1,322 pts to close at 22,348 pts. In view of yesterday’s closing, the index has taken out the previously indicated 22,000-pt resistance, implying that the positive sentiment remains intact. Technically, yesterday’s long white candle can be viewed as a continuation of the bulls extending the rebound from the recent low of 23 Mar. As such, we think the bulls are still in control of the market.

Presently, the immediate support level is anticipated at 21,700 pts, set near the midpoint of 26 Mar’s long white candle. The next support is seen at 20,510 pts, ie the low of 26 Mar. On the other hand, we are eyeing the nearterm resistance level at the 23,000-pt round figure. This is followed by 23,850 pts, ie near 12 Mar’s high.

Hence, we advise traders to stay long, in line with our initial recommendation to have long positions above the 20,280-pt level on 26 Mar. For now, a trailing-stop can be set below the 20,510-pt threshold in order to limit the downside risk.

Source: RHB Securities Research - 27 Mar 2020