UAE markets continue to bump against resistance, while pointing higher | GulfNews.com

Dubai: Last week the Dubai Financial Market General Index (DFMGI) rallied 193.32 or 5.26 per cent to close at 3,867.61. Most issues gained, with 26 advancing and only eight declining, while volume reached a three-week high, and the fourth highest level of the past six months.

The DFMGI closed above the prior week’s high of 3,801.58, a short-term bullish sign. Next watch for a decisive daily close above last week’s high to provide the next bullish signal, with the index then heading towards the most recent swing high of 4,008.38. A daily close above that swing high triggers a bullish trend continuation of the rally that began off the 2,992.53 corrective low around mid-December. If this occurs then the DFMGI has a good chance of rising to at least the bottom of a potential resistance zone that starts around 4,231.12.

That’s the bottom or support of a six-week consolidation phase that took the form of a symmetrical triangle pattern back in October/November 2014, and part of a larger multi month symmetrical triangle formation. This larger pattern turned out to be a top, putting an end to the rally that began from the June 2012 swing low. Once the DFMGI broke down from that pattern at the end of November 2014, it rapidly fell before finding support at 2,992.51.

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