Market is holding above the 10-day SMA line; stay long. After posting three white candles in a row, the E-mini Dow ended lower to form a black candle last Friday. It lost 911 pts to close at 21,437 pts, off the session’s high of 22,545 pts. However, the positive sentiment stays unchanged, as the index has remained above the 10-day SMA line and the 20,510-pt support mentioned previously. On a technical basis, we think buyers may continue to control the market, since the E-mini Dow has not erased the gains from 26 Mar’s white candle. Overall, we stay positive on the index’s outlook.

As seen in the chart, we are eyeing the immediate support level at 20,510 pts, determined from the low of 26 Mar’s white candle. Meanwhile, the next support is situated at the 20,000-pt psychological mark. Towards the upside, we anticipate the near-term resistance level at 22,545 pts, ie the high of 27 Mar. This is followed by 23,850 pts, set near the high of 12 Mar.

Therefore, we advise traders to maintain long positions, given that we initially recommended initiating long above the 20,280-pt level on 26 Mar. A trailing-stop can be set below the 20,510-pt mark to limit the downside risk.

Source: RHB Securities Research - 30 Mar 2020