UAE markets take a beating | GulfNews.com

UAE markets take a beating | GulfNews.com:

"Last week the Dubai Financial Market General Index (DFMGI) declined by 150.98 or 5.09 per cent to close at 2,815.45, its lowest level since mid-November 2013. This was the largest drop in five weeks and it occurred on slightly rising volume, the second highest volume of the past 20 weeks. There were 34 issues that fell and only four that advanced.

The DFMGI has fallen nine out of the past 10 days, indicating that the sell-off is getting closer to a short-term bottom. At the same time the index has only just started to dip into oversold territory based on the 14-day Relative Strength Index (RSI) momentum oscillator, pointing to continued downward pressure. In addition, the week ended weak, closing near the low. Plus, a bearish trend continuation signal for the long-term 20-month downtrend was given as the index dropped below the prior two-year low of 2,851.24, and it closed below that price level on a weekly basis. The low for the week was 2,802.40. At that point the DFMGI was down 48.2 per cent from its May 2014 peak of 5,406.62.

Of greater concern is the technical damage that has been done for the intermediate time horizon. In addition to the long-term bear trend signal, the DFMGI has now fallen well below its 200-week simple moving average (sma) (3,131.64), one indicator used to determine the health of the long-term uptrend (weakening), and has fallen decisively below and closed below the long-term uptrend line. Further, the 61.8 per cent Fibonacci retracement level of the long-term uptrend, at 2,865.04, has been exceeded to the downside. During the last dip in December support was found around that retracement area."



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