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KSE weighted index soars to highest level in over five yrs Technical indicators overbought

Technical analysis view on Kuwait Stock Exchange (KSE) - The below graph that trends the performance of Kuwait Weighted Index (Market IXW) shows that the index has been taking a strong bullish trend since March 18th that lead it to a high not seen since November 2008. The recent up-trend gave a buy signal for short-term investors at levels higher than 460 points on March 18, medium and long term investors were already in the market since September 2013 though, when the index started to trade at levels higher than 445 points.

The increase seen in the market capitalization weighted index generated over 10% gain for investors in the Kuwaiti market since the beginning of 2014. However, the index is now facing a resistance at around the 500 point level, and an increase in trading volume might be sufficient to push it higher to the next resistance at 530 points, within the medium term period. Technical indicators are currently overbought; but no reversal sign is printed yet to give a profit book alert. Therefore, short-term investors can continue to hold their positions as long as the index is maintaining a close at levels higher than the near support line at 475 points. Meanwhile, medium and long term investors can continue to hold their positions and book profits only if the index retreats to below 460 points and 450 points, for medium and long term investors, respectively.

By Kuwait Finance House

By: Kuwait Finance House

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