Maintain long positions. The E-mini Dow ended higher to form a white candle last night. This was for the second consecutive day, which implies that the positive sentiment is still intact. The index gained 190 pts to close at 23,761 pts, after oscillating between a high of 24,057 pts and low of 23,577 pts. From a technical viewpoint, the 14-day RSI indicator recently rose above the 50 neutral point to flash a bullish reading at 52.88 pts – this has enhanced the positive sentiment. Overall, we keep our positive view on the E-mini Dow’s outlook.

According to the daily chart, we are now eyeing the immediate support level at 23,208 pts, ie the low of 4 May. If a breakdown arises, look to 22,814 pts – which was the low of 22 Apr’s “Bullish Harami” pattern – as the next support. On the other hand, the immediate resistance level is seen at 24,792 pts, defined from 30 Apr’s high. The next resistance is maintained at the 25,000-pt psychological mark.

Hence, we advise traders to maintain long positions, since we initially recommended initiating long above the 20,280-pt level on 26 Mar. For now, a trailing-stop can be set below the 23,208-pt threshold in order to lock in part of the profits.

Source: RHB Securities Research - 6 May 2020