Stay long provided that the 23,535-pt support is not violated at the closing. The E-mini Dow formed a positive candle last night. It rose to a high of 23,658 pts during the intraday session, before ending at 23,571 pts for the day. Given that the index has failed to close below the previously indicated 23,535-pt support, it suggests that the upside move is not over yet. Moreover, the 10-day SMA line is still pointing upwards, suggesting additional upward momentum may be present in the coming sessions. Overall, we maintain a positive view on the E-mini Dow’s outlook.

Based on the daily chart, the immediate support level is seen at 23,535 pts, defined from 27 Apr’s low. The crucial support is maintained at 22,814 pts, ie the low of 22 Apr’s “Bullish Harami” pattern. Towards the upside, we anticipate the immediate resistance level at 24,792 pts, obtained from the high of 30 Apr. Meanwhile, the next resistance would likely be at the 25,000-pt psychological spot.

Therefore, we advise traders to stay long, following our recommendation of initiating long above the 20,280-pt level on 26 Mar. At the same time, a trailing-stop set below the 23,535-pt threshold is advisable in order to secure part of the gains.

Source: RHB Securities Research - 5 May 2020