The Dubai Financial Market General Index (DFMGI) was down 16.85 or 0.46 per cent last week to end at 3,633.91. Market breadth was bearish with 19 declining issues and 11 advancing, while volume fell slightly below the level of the prior week.
Even though the index was down for the week it made a decent recovery after falling as much as 2.7 per cent at the week’s low of 3,551.01 reached on Tuesday. That decline gave bearish signals. However, the week ended with the DFMGI in the top quarter of the week’s price range, a short-term bullish sign. Bearish signals earlier in the week included a breakdown of a relatively narrow six-week consolidation phase on a move below 3,608.40, and a drop below the 55-day exponential moving average (ema), which is now at 3,615.50.
A relatively sharp rally occurred off the week’s low (at the 21-week ema) on Wednesday. Therefore, the 21-week ema is a key trend indicator to watch for support in the future. If last week’s low holds during future weakness then it is a key component of the price structure of the three-month uptrend (higher swing low) and possibly the 13-month uptrend.
It remains to be seen whether last week’s short-term bullish behaviour (decisive weakness earlier in the period reversing to strength by the end) will be sustainable and allow the recent highs to be challenged in the foreseeable future.—Agencies