Stay long, with a trailing-stop set below the 22,900-pt support. The E-mini Dow ended higher to form a “Doji” candle last Friday. It rose 752 pts to close at 24,159 pts, off the session’s low of 23,701 pts. Market sentiment remains positive, as the index has closed above the 24,000-pt threshold and hit its highest point in more than a month. We view last Friday’s positive candle as a continuation of the bullish reversal pattern of 2 Apr’s “Bullish Harami”. Overall, we keep our positive view on the E-mini Dow’s outlook.

As seen in the chart, we are eyeing the immediate support level at 22,900 pts, ie near the low of 13 Apr. If a breakdown arises, look to 21,700 pts – set near the midpoint of 6 Apr’s long white candle – as the next support. Towards the upside, we maintain the resistance level at the 24,500-pt round figure. This is followed by the 25,000- pt psychological spot.

Therefore, 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 can be set below the 22,900-pt mark to lock in part of the gains.

Source: RHB Securities Research - 20 Apr 2020