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Technical indicators neutral KSE weighted index edges higher in July

KUWAIT CITY, July 25: In our last analysis on Kuwait Market Weighted Index (IXW) we highlighted the fact that the index dropped in a long bearish candle stick before the end of June 2014, crossing below the narrow horizontal channel “between 487-492 points” which it was trading within since the beginning of May 2014, then below the (76.4% level of Fibonacci Retracements between 388 points and 502 points) at 475 points, and down further to touch the medium-term moving average trend at 468 point, but could not break below.
 
However, during the first week of July 2014, the index managed to form a Doji pattern, which is a powerful Candlestick formation signifies indecision between bulls and bears, and is considered a bullish reversal sign. And as expected, the index started to gradually increase crossing above its 76.4% level during the second fortnight and is currently traded little above its short-term moving average (at 480 points).
 
Technical indicators are almost neutral; however, if the current support line at 480 points holds, with some increase in volume, the index can go further to higher levels in the coming short-to medium term and will give a buy signal for short-term investors at levels higher levels.
 
However, on the down side, any break below the support line at 475 points will put medium-term investors in danger, and they need cash their investments out if the index dropped to below 470 points level.  For the long-term investors, the cash out level remains the same at 454 points, thus, they can continue to hold their stocks for the mean time as long as the index is traded higher than the mentioned level.
 
By KFH Research

By: KFH Research

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