Sideways trading likely on the Dubai bourse - Emirates24|7

Sideways trading likely on the Dubai bourse

Wadah Al Taha (SUPPLIED)

Dubai Financial Market is expected to trade sideways this week prior to the fourth-quarter results by companies, analysts say.

There are positive and encouraging signs in the market as institutional investors are likely to start booking and enhancing their portfolios with the beginning of the new year, according to Wadah Al Taha, a senior market analyst.

"There are encouraging signs as the market has already discounted the expected negative results of listed companies, while regional and global markets bounced back at the beginning of the week, giving positive indicators to local markets," he said.

The DFM index closed at 1,636.29 points at the end of the last session of 2008, just above its support level of 1,550 points and is expected to stay higher for some more time.

"Technically, DFM is on the descending channel support of 1,550 and the pivot level calculated from the 2008 yearly candle chart shows that the critical resistance for 2009 comes at 3,163 which can be seen in the late 2009 as the markets will face strong resistance," said Shiv Prakash, analyst at MAC Capital Advisors.

Abu Dhabi Securities Exchange closed at 2390.01. The market maintained above the critical support level of 2,344 points and it is expected to see the corrective bounce continuing towards 2,369-2,383 levels.

Prakash recommended DFM, Arabtec, Air Arabia, Aldarand Sorouh stocks for long-term investments.

"Oil is expected to perform sideways in the range of $30 to $55 in the coming year. Accordingly, the sharp rise in local markets remains doubtful but we may see good corrective bounce in DFM until 2,100-2,300 levels in the first quarter, he said.

He said global real estate and banking sectors could face some pressure with defaults on loans and the retail sector, which also looked under pressure, bankruptcy rate also seemed to increase.

"Local markets which follow the foot prints of international markets are not expected to show any sudden rise until mid-2009."

 

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