Stay long. The E-mini Dow formed a black candle last night. It lost 671 pts to settle at 23,488 pts, off its high of 24,203 pts. However, from a technical viewpoint, we believe the upside move is not over yet, as the index has not erased more than 50% of the gains from 8 Apr’s white candle. Last night’s black candle indicates profit-taking activities after the recent gains, in our view. Overall, we expect the market to rise further if the recent high 24,327- pt resistance is taken out decisively in the coming sessions.

Based on the daily chart, the immediate support level is seen at 22,900 pts, situated near the low of 13 Apr. The next support would likely be at the 22,000-pt round figure. To the upside, we now anticipate the immediate resistance level at 24,327 pts, ie the high of 17 Apr. Meanwhile, the next resistance is maintained at the 25,000-pt psychological mark.

Hence, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the 20,280-pt level on 26 Mar. A trailing-stop set below the 22,900-pt threshold is advisable in order to lock in part of the gains.

Source: RHB Securities Research - 21 Apr 2020