Buying momentum likely to persist; stay long. The E-mini Dow’s upside move continued as expected. A white candle was formed last Friday, which pointed towards a continuation of the market rebound. The index gained 321 pts to settle at 23,658 pts, off the session’s low of 23,155 pts. Technically, market sentiment remains positive, as the E-mini Dow has marked a higher close above the previously indicated 22,814-pt support and climbed above the 10-day SMA line. Last Friday’s white candle can be viewed as a continuation of the bullish reversal pattern of 22 Apr’s “Bullish Harami”. Overall, we keep our positive view on the index’s outlook.

According to the daily chart, the immediate support level is seen at 22,814 pts, which was defined from the low of 22 Apr’s “Bullish Harami” pattern. Meanwhile, the next support is maintained at the 22,000-pt round figure. To the upside, we are eyeing the immediate resistance level at 24,327 pts, ie 17 Apr’s high. If a breakout arises, the next resistance is situated at the 25,000-pt psychological mark.

Hence, we advise traders to stay long, in line with our initial recommendation to have long positions above the 20,280-pt level on 26 Mar. A trailing-stop can be set below the 22,814-pt mark to lock in part of the profits.

Source: RHB Securities Research - 27 Apr 2020