The Dubai Financial Market General Index (DFMGI) dropped 323.22 or 7.19 per cent last week to close at 4,171.15, its weakest performance in seven weeks. Most listings fell as there were 29 declining issues and six advancing. With the shortened three day trading week volume fell to an eight week low.
Of significance is that the DFMGI has broken down out of a large symmetrical triangle consolidation top pattern as it closed below 4,231.12 (swing low from early October) on a weekly basis, and has closed below the 55-week exponential moving average (ema) for the first time July 2012. The 55-week ema is a long-term trend indicator. It was tested as support twice in the past six months or so with the index rallying off it each time. This time looks to be different especially given that the breakdown of the triangle is happening at the same time. In addition, the index ended the week near the low of the weekly range. Together, these factors point to further weakening over the coming weeks and months.
Of significance is that the DFMGI has broken down out of a large symmetrical triangle consolidation top pattern as it closed below 4,231.12 (swing low from early October) on a weekly basis, and has closed below the 55-week exponential moving average (ema) for the first time July 2012. The 55-week ema is a long-term trend indicator. It was tested as support twice in the past six months or so with the index rallying off it each time. This time looks to be different especially given that the breakdown of the triangle is happening at the same time. In addition, the index ended the week near the low of the weekly range. Together, these factors point to further weakening over the coming weeks and months.
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