Initiate long positions above the 24,000-pt level. The E-mini Dow formed a long white candle last night. It surged 990 pts pts to close at 24,507 pts. Technically speaking, the index has breached above the 23,780-pt resistance mentioned previously and the 10-day SMA line, implying that the sentiment is turning positive. The latest candle has also sent the index to its highest point in more than two weeks, enhancing the positive sentiment. Yesterday’s closing has also triggered our stop-loss, which we had previously recommended at the 23,780-pt threshold.

As seen in the chart, the immediate support level is seen at the 24,000-pt psychological mark. The next support is anticipated at 23,241 pts, ie the low of 15 May. To the upside, we anticipate the immediate resistance level at 24,792 pts, determined from the high of 30 Apr. Meanwhile, the next resistance would likely be at 25,356 pts, ie the high of 9 Mar.

Therefore, we advise traders to initiate long positions above the 24,000-pt level. A stop-loss can be set below the 23,241-pt mark in order to limit the downside risk.

Source: RHB Securities Research - 19 May 2020