Outlook remains positive, stay long. The E-mini Dow formed a “Doji” candle last night. It settled at 22,491 pts after hovering between a high of 23,477 pts and low of 22,300 pts. Still, the positive sentiment remains unchanged, as this candle can only be viewed as buyers taking a probable breather after the recent gains. Since the index is still holding above the rising 10-day SMA line, this indicates the upside move is not over yet. Overall, we believe the rebound that started off 2 Apr’s “Bullish Harami” pattern should persist in the coming sessions.

Based on the daily chart, the immediate support level is maintained at 21,700 pts, ie near the midpoint of 6 Apr’s long white candle. If a breakdown arises, look to 20,500 pts – the low of 2 Apr’s “Bullish Harami” pattern – as the next support. On the other hand, the immediate resistance level is now anticipated at 23,477 pts, ie the high of 7 Apr. Meanwhile, the next resistance is situated at the 24,000-pt psychological mark.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 20,280-pt level on 26 Mar. A trailing-stop can be set below the 21,700-pt threshold to lock in part of the profits.

Source: RHB Securities Research - 8 Apr 2020