Dubai Financial Market General Index obeys the technical factors – Technical Analysis
By studying the daily chart of Dubai Financial Market General Index (DFMGI), we will find that the decline that started from the top 5406.00 is considered as a bearish correction for the entire bullish wave from 1575.00 to the mentioned top, and by taking a deeper look at the chart, we notice that the correctional decline completed drawing a double top pattern by breaking its neckline that met with 38.2% Fibonacci at 3950.00.
This pattern has negative targets that begin at 3040.00, while the full target for this pattern at 2485.00, thus, the bullish rebound that appeared on Thursday’s trading (yesterday) is considered as a normal bullish rebound due to the strength of the support line that the index touched at 3040.00, which represents the place that the first target of the above mentioned pattern met with the 61.8% Fibonacci for the bullish wave.
Besides that, stochastic offers positive signals on the daily time frame, to reinforce the chances of offering bullish bias in the upcoming sessions, and the next main target is represented by retesting the broken neckline at 3950.00, which represents the most important key to detect the Index’s next trend on the short term and medium term basis.
It is important to monitor the Index behavior when reaching the suggested target, as breaching it will push the index to regain the general bullish trend again, with targets that begin at 4500.00 followed by turning back to visit the previously recorded highs at 5406.00, while its strength against the expected rise will push the index to decline and to keep the negative effect of the mentioned double top pattern, to pus the index to target 2485.00 level mainly.
To request detailed analysis for any stock or index, please follow this link.