gulfnews : Dubai downtrend to continue

The Dubai Financial Market General Index (DFMGI) declined 9.99 or 0.64 per cent last week to close at 1,547.86 while volume was lower. Declining issues beat advancing by 21 to eight, respectively.

Until proven otherwise the DFMGI continues to develop a downtrending channel since hitting a high of 1,691.64 on April 24, 2011. This trend has retraced approximately 50 per cent of the uptrend measured from the early March 2011 low as of June 28. The 200 period exponential moving average (ema) on both the daily and weekly chart of the DFMGI continues to slope downward.

Going forward it's possible that the DFMGI holds support of 1,503.57, the low of June 28 and moves into a longer consolidation period than we've seen the past couple weeks. This could include moving above the downtrend line which identifies the parameter (resistance) of the 12 week downtrend and the 200 ema on the daily chart (seen in accompanying chart) which is now at 1,489.81. The significance of a move above these two indicators would be muted if it happens over the next couple weeks given the price pattern structure that may now be developing.

* username: rupertbu