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Abu Dhabi bourse hits highest level in 5 years Next target at 4,300 pts

KUWAIT CITY, Dec 13: In our previous analysis on Abu Dhabi Securities Market (ADX) General Index over one month ago, we said that ADX managed to continue its rise after crossing above its (76.4 percent level of Fibonacci retracements from 2,292 to 3,976) at 3,578 point at that time, and then gave a buy signal for short-term investors at levels higher than 3,694 point in mid of September. We also mentioned that the index maintained its uptrend since then and was traded within a narrow range between 3,831 point and 3,902 point since the beginning of October 2013.

Our previous expectation became reality when said that an increase in volume would be sufficient to push the index higher to cross over the upper resistance line and then further to its year high at 3,976 point once again. After four weeks of rising, ADX did actually break its year high, recording a new high when crossed over the 4,000 point level for the first time since October 2008 then touched its highest level since September 2008 at 4,029.88 point, hence generating great gains for investors of all time periods of the last five years. It closed the week at 4,000.94 point.

The next targeted line will be at 4,300 point for the medium to long term, as no sign of a reversal is yet shown; however, some profit booking might be seen that could cause a healthy correction in the index down to the support lines at 3,939 point or 3,907 point, respectively.  Short-term trend will only turns bearish below 3,847 point, and till then short-term investors can continue to hold their stocks. While medium and long term trends are still on the rise giving a hold for their investors.

By Kuwait Finance House

By: Kuwait Finance House

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