Stay long. The E-mini Dow’s buying momentum continued as expected. A white candle was formed last night, which pointed towards a continuation of the upside move. It rose 755 pts to close at 23,246 pts, off the session’s low of 22,244 pts. Technically, investor sentiment remains positive. This is as the index posted a white candle above the rising 10-day SMA line. In addition, the 14-day RSI indicator rose above the 50 neutral point to flash a bullish reading at 53.07 pts, an indication that the positive sentiment has been enhanced. Overall, we expect the market to rise further if the immediate – previously mentioned – 23,477-pt resistance is taken out in the coming sessions.

As seen in the chart, we anticipate the immediate support level at 21,700 pts, which is set near the midpoint of 6 Apr’s long white candle. The next support is seen at 20,500 pts – this was determined near the low of 2 Apr’s “Bullish Harami” pattern. To the upside, the near-term resistance level is maintained at 23,477 pts, which was 7 Apr’s high. This is followed by the 24,000-pt psychological spot.

Hence, we advise traders to stay long, given that we previously recommended initiating long above the 20,280-pt level on 26 Mar. A trailing-stop set below the 21,700-pt mark is advisable to lock in part of the gains.

Source: RHB Securities Research - 9 Apr 2020