Market rebound is likely to continue; stay long. The E-mini Dow’s buying momentum continued as expected. A white candle was formed yesterday, which pointed towards a continuation of the upside move. It gained 730 pts to close at 22,167 pts, off the session’s low of 20,778 pts. Market sentiment remains positive, as the index has recouped most of the previous day’s losses and marked a higher close above the 10-day SMA line. We view yesterday’s white candle as a continuation of the rebound that began from 24 Mar’s long white candle. Overall, we keep our positive view on the E-mini Dow’s outlook.

Currently, we anticipate the immediate support level at 20,510 pts, ie the low of 26 Mar’s white candle. The next support is maintained at the 20,000-pt psychological spot. On the other hand, the immediate resistance level is seen at 22,545 pts, which was the high of 27 Mar. If a breakout arises, look to 23,850 pts – obtained near the high of 12 Mar – as the next resistance.

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. A trailing-stop can be set below the 20,510-pt mark to limit the risk per trade.

Source: RHB Securities Research - 31 Mar 2020