Stay long while setting a trailing-stop below the 23,208-pt support. Last night, the E-mini Dow ended higher to form a white candle, increasing by 330 pts to settle at 23,843 pts, after oscillating between a high of 23,999 pts and low of 23,428 pts. On a technical basis, the upside move is likely to continue, after the index has recouped the previous session’s losses. This may also further extend the rebound that started with 4 May’s white candle. Overall, we stay positive on the E-mini Dow’s outlook.

As seen in the chart, the immediate support level is maintained at 23,208 pts, determined from the low of 4 May. The next support is seen at 22,814 pts, ie the previous low of 21 Apr. Towards the upside, we now anticipate the resistance level at 24,057 pts, obtained from 5 May’s high. This is followed by 24,792 pts, which was the previous high of 30 Apr.

Thus, 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 23,208-pt threshold in order to secure part of the gains.

Source: RHB Securities Research - 8 May 2020