UAE markets working to confirm bottoms | ZAWYA MENA Edition:
"The Dubai Financial Market General Index (DFMGI) dropped by 40.76 or 1.18 per cent last week to close at 3,420.17. Most issues were down as there were only seven that advanced against 29 declining. Volume fell to a multi-week low, but that can be attributed to the four-day trading week due to the holiday. For the past four weeks the DFMGI has been trying to secure a bottom after falling as much as 8.21 per cent from the October peak as of the 3,382.83 low hit two weeks ago. During the recent decline the index retraced approximately 70 per cent of the prior rally that began from the June low. That’s a good amount and therefore it wouldn’t be surprising to see the recent bottom hold and lead to at least a bounce higher. Further supporting the potential for a rally is the recent price pattern that has formed. It has taken the form of a potential bullish inverse head and shoulders pattern. This is a classic trend reversal pattern that can be used to mark the end of a downtrend and the beginning of an uptrend. Nevertheless, the pattern is not considered valid until there is an upside breakout. Until then the pattern can evolve into a different consolidation pattern and can also just be a rest before the downtrend continues."
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