UAE markets at critical juncture | GulfNews.com

UAE markets at critical juncture | GulfNews.com:

"Last week the Dubai Financial Market General Index (DFMGI) jumped 111.41 or 3.74 per cent to close at 3,092.89. There were 29 advancing issue and only seven declining, while volume improved to a two-week high.

The high for the week was 3,106.48, right where two trend lines converge, the long-term uptrend line starting from the 2012 low and the downtrend line started from the July-2015 highs, together creating an important resistance area. That high was close to where the DFMGI closed, but still below the prior week’s high of 3,124.69, generating an inside bar or inside week. This is where the high-to-low range of the current week is contained within the range of the prior week. It represents a certain amount of indecision as there was no progress on either the upside or downside of the trend.

If the index can get above the two-week high and stay there it will then be above the two trend lines, a sign of strength, but not enough by itself to clear the road higher. What happens thereafter is of greater significance. Potential resistance of the 200-week simple moving average (sma) is at 3,162.81, followed by the December swing high at 3,188.83. That swing high needs to be exceeded on a daily closing basis before there is an indication that there could be more upside in the foreseeable future. At that point the downtrend price structure would be violated as there would no longer be a series of low swing highs and lower swing lows, the definition of a downtrend. "



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