Did Kuwait Market Bottom out ?

Last week and specifically on 24^th Jan 2016, the Gulf Stock Market has reversed and went bullish without any advance notice … the market got better in one week achieving significant level comparing to previous months … for example, 44 points increase in Kuwait market within a week from 768 to 812. Another example is Saudi Arabia from 5452 to 5889 … The questions remain: what was the reason for such surge? Is this a solid bullish trend that will last or just a leap to get ready to continue its steep bearish trend? Did we bottom out and it is the end of bearish trend that started 2 years ago?

 In order to answers these questions, let us talk about Kuwait Financial Market and performance of last month … the following is a chart that shows our previous expectations and the levels we have mentioned earlier in our YouTube Videos … it broke the support resistance at 883 and it went to 845 as expected. It did not stop at that level, it actually break it to hold off at 768 …

Kuwait Stock Market – Jan 2016

So back to our questions: the main reason for such improvement was the price of Oil. Last week the price of oil went up from 26 to 33, the next week our market went up drastically to be aligned with oil prices movement. Is this a long last bullish trend? The answers it depends on the action will be taken by traders next week. Kuwait Market is at critical stage right now confronting a strong resistance level at 811, there are two scenarios as shown in below figure. First scenario is to break this resistance and go to the next resistance at 837, and there is a very small window to get pass this line around 7 days ends by 7^th of Feb 2016. If it doesn’t break it at that time, the chance will be weak and probability of bouncing off will increase … then the second scenario will be triggered to bounce back to test the major support resistance at 768. If it breaks it, there is a high probability to go and test 716

To sum up the above, the chance of improvement is tied with oil prices. Talking about long last bullish trend is low probability; Kuwait has to break the mentioned resistance level in order to be able to end this bearish trend.