Market rebound is likely to persist; maintain long positions. The buying momentum in the E-mini Dow continued as expected. A white candle was formed last night, which pointed towards a continuation of the upside move. It gained 341 pts to settle at 23,999 pts, off its low of 23,535 pts. On a technical basis, we believe the uptrend is likely to continue, given that the index has posted a second consecutive white candle above the 10-day SMA line. Meanwhile, the 14-day RSI indicator recovered to a more positive reading at 55.23 pts, enhancing the positive sentiment. Overall, we stay positive on the E-mini Dow’s outlook.

Presently, we anticipate the support level at 22,814 pts, ie the low of 22 Apr’s “Bullish Harami” pattern. This is followed by the 22,000-pt round figure. Towards the upside, the immediate resistance level is maintained at 24,327 pts, defined from 17 Apr’s high. The next resistance would likely be at the 25,000-pt psychological spot.

Therefore, we advise traders to stay long, since we previously recommended initiating long above the 20,280-pt level on 26 Mar. A trailing-stop set below the 22,814-pt mark is advisable to secure part of the gains.

Source: RHB Securities Research - 28 Apr 2020