Stay long, with a trailing-stop set below the 22,814-pt support. The E-mini Dow formed a “Doji” candle last night. It settled at 24,045 pts after hovering between a high of 24,435 pts and low of 23,878 pts. Given that the index has managed to stay above the recent low of the 22,814-pt support for a week, this suggests the upside swing is not diminished yet. Moreover, the 10-day SMA line is likely to start turning higher, suggesting additional buying momentum may be present in the coming sessions. Overall, we maintain a positive view on the E-mini Dow’s outlook.

As shown in the daily chart, the immediate support level is now seen at 23,535 pts, ie 27 Apr’s low. The next support will likely be at 22,814 pts, which was obtained from the low of the low of 22 Apr’s “Bullish Harami” pattern. On the other hand, we anticipate the immediate resistance level at 24,435 pts, ie the high of 28 Apr. Meanwhile, the next resistance is maintained at the 25,000-pt psychological mark.

Hence, we advise traders to maintain long positions, following our recommendation of 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 - 29 Apr 2020