- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:31 06:49 12:14 15:11 17:33 18:52
UAE stock markets are expected to continue sideways trading with a chance to bounce on the signs of oversold positions. However, the main trend shows a downtrend.
Investors remain outside the market for want of a clear direction. This situation is pushing the turnover to low levels. Dubai Financial Market is expected to bounce this week and test the short-term resistance area of 1590 points. The DFM index lost 2.71 per cent last week after it moved up on Thursday thus reducing its losses to close at 1581.94. The turnover dropped sharply and it recorded low levels during the week. The average daily turnover last week reached around Dh167million.
"The market is oversold after it witnessed selling pressures last week. When the index broke through the level of 1590 points we witnessed selling pressures in these areas," said Ahmed Hetta, Head of Research at Tadawul Shares and Bonds Mediation. "We expect the market to rise and test this area again this week. The ability of the DFM index to remain above 1590 will be critical for more bullishness, which may take the index to the next resistance area of 1635 points."
"If the DFM index failed to bounce up it may test its support area of 1540 points, which is its previous low during January," said Hetta.
Hosam Al Husseini, Head of Brokerage in Emaar Financial Services expects the DFM index to move in the range of 1540-1620 points this week due to the lack of movers. "The market is projected to continue in sideways trend unless there are surprises that could change this trend. However, there are no strong movers in the near term."
"We may witness some movements on selected stocks that will announce their financial results for 2009 soon such as Arabtec and DFM stocks. Also, the movements will focus on firms that will distribute cash dividends," he added.
Abu Dhabi Securities Exchange lost 2.35 per cent last week to close at 2701.51. The average daily turnover last week reached Dh117.1 million. The ADX is trading very close to a critical level of 2700 points which will determine the coming trend. "The ADX witnessed profit booking pressures last week after the market advance in the previous week. These pressures dragged the index to the critical support area of 2700 points and the market should bounce up to the resistance area of 2780 points," said Hetta.
He said if the ADX index went down the 2700 points it might face strong downturn movement to its previous low of 2586 points which were recorded last month.
Al Husseini also expected that the ADX might move in a narrow range as it is facing the support area of 2675-2700 points. "Active stocks in the market especially Aldar faced strong downside pressures last week which are giving weak signals. However, heavyweights including Etisalat and banking stocks such as FGB were supporting the index. Heavyweights will decide the trend in the ADX in the near term."
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.