Maintain long positions while setting a trailing-stop below the 22,814-pt support. The E-mini Dow formed a “Doji” candle last night, closing at 23,337 pts off its high and low of 23,772 pts and 23,231 pts. However, we maintain our positive sentiment, as the index is still trading above the recent low of the 22,814-pt support. That said, as long as the bullishness of 22 Apr’s “Bullish Harami” pattern is not negated, this should show that the market rebound is still in effect. Overall, we maintain a positive view on the E-mini Dow’s outlook.

As seen in the chart, we are eyeing the immediate support level at 22,814 pts, ie the low of 22 Apr’s “Bullish Harami” pattern. If a breakdown arises, the next support is seen at the 22,000-pt round figure. On the other hand, we anticipate the resistance level at 24,327 pts, or 17 Apr’s high. This is followed by the 25,000-pt psychological spot.

Hence, we advise traders to maintain long positions, since we originally recommended initiating long above the 20,280-pt level on 26 Mar. In the meantime, a trailing-stop can be set below the 22,814-pt threshold to lock in part of the profits.

Source: RHB Securities Research - 24 Apr 2020