Stay long while setting a trailing-stop below the 22,545-pt level. The upside strength in the E-mini Dow continued as expected. Another white candle was formed last night, which pointed towards a continuation of the upside move. It gained 372 pts to close at 23,618 pts. In view of yesterday’s close, the index has taken out the previously indicated 23,477-pt resistance – this indicates the presence of positive sentiment. From a technical perspective, yesterday’s white candle can be viewed as a continuation of the bulls extending the upside swing from 2 Apr’s “Bullish Harami” pattern. As such, we think the buyers are still in control of the market.

For now, the immediate support level is seen at 22,545 pts, ie the high of 27 Mar. The next support is maintained at 21,700 pts, which is situated near the midpoint of 6 Apr’s long white candle. On the other hand, we are eyeing the near-term resistance level at the 24,000-pt psychological mark. This is followed by the 25,000-pt round figure.

To recap: We initially recommended traders to initiate long positions above the 20,280-pt level on 26 Mar. We continue to advise them to stay long for now while setting a trailing-stop below the 22,545-pt threshold to lock in a larger part of the profits.

Source: RHB Securities Research - 10 Apr 2020