Stay long, with a stop-loss set below the 23,241-pt support. The E-mini Dow ended lower to form a black candle last night. It lost 349 pts to close at 24,158 pts, after oscillating between a high of 24,765 pts and low of 24,120 pts. Still, the bullish sentiment stays unchanged as this candle can only be viewed as buyers probably taking a breather after the recent gains. Since the index is still holding above the 10-day SMA line, this indicates that the upside move is not over yet. Overall, we believe the upside swing that started off 14 May’s “Hammer” pattern would likely persist in the coming sessions.

According to the daily chart, we anticipate the immediate support level at the 24,000-pt psychological spot. If this level is taken out, look to 23,241 pts, which was the low of 15 May. On the other hand, the immediate resistance level is seen at 24,792 pts, ie the high of 30 Apr. The next resistance is situated at 25,356 pts, obtained from the high of 9 Mar.

Hence, we advise traders to stay long, following our recommendation of initiating long above the 24,000-pt level on 19 May. A stop-loss can be set below the 23,241-pt threshold in order to minimise the downside risk.
 

Source: RHB Securities Research - 20 May 2020