Detailed outlook for Dubai Financial Market March 2016

Middle East Stock Markets – Dubai

Middle East Stock markets started to recover especially after the recent surge in Oil prices occurred in 20^th of Jan 2016. Comparing with last month, all Gulf Region Markets started to show bullishness signs. The level of improvement varies them but Dubai and Abu Dhabi are leading the markets. For a better understanding, the following graphical view shows the status of all timeframe for all Gulf Region Markets. It helps us to identify the improvements within one market and relatively to others.

  

Country	60	120	240	Daily	Weekly	Monthly
Kuwait
Dubai
Abu Dhabi
Saudi
Bahrain
Qatar
Oman

Figure 1: IchimokuTrade RT Scanner: Middle East Markets Heat Map for Feb 2016

Comparing to last month, the bullishness strategies are much more especially in the lower timeframe. Green color is covering almost half the table. Another major observation is higher timeframe (Daily, Weekly & monthly) started to reverse in most countries and shifted from RED to Amber. Daily timeframe in all markets is Green. Abu Dhabi, Dubai and Kuwait are doing better than the rest. Oman and Bahrain are at the bottom of the list.  Saudi and Qatar are in the middle and facing major resistances. The question remains “Is the current bullish trend sustainable?”

To answer this question, we will cover Dubai Market since it is the less affected market by the previous drop of Oil prices and maintained its bullishness level better than the rest. The following graph shows how Dubai market is linked to oil prices. The reverse trend in Oil prices in 20^th of Jan 2016 pushed the market drastically up the next day and everyone started to talk about bottom out. 

Figure 2: eSignal Daily Chart of Oil Prices and Dubai Financial Markets from Jan till Feb 2016

Let us go to our technical analysis and verify whether the market disposed of the bearishness influence or not.  We will start with Monthly timeframe and see where we stand from high level perspective. Since Aug 2015 the market was going bearish drastically to the top of the Kumo Cloud, which is also 61.8% Fibonacci level on the quarterly timeframe. It closed below that level on weekly timeframe but it never closed on the monthly. This confirms that monthly timeframe is controlling the destiny of Dubai market and overrides the lower timeframe. Now price should go up to the next resistance at 3411 and there is a high probability to break it since it is not Multiple Timeframe Resistance.

Figure 3: eSignal Monthly Chart of Dubai Market

As for weekly, it has a bullishness sign that is controlled by Monthly timeframe. However, weekly will start pushing the other way and going against the monthly in March. This reverse trend also will be supported by daily timeframe till 2^nd week of March. The bearish effect will be reduced gradually till the end of March 2016. The following graph shows the weekly charts of Dubai Market and the expected support and resistance.

Figure 4: eSignal Weekly Chart of Dubai Market

In conclusion, the current bullish trend is still facing some bearishness effects and there is a high probability that Dubai stock market will start to consolidate in March between two levels 3292 and 2892 due to the battel between Monthly and Weekly timeframes. The bearishness will be reduced gradually and there will be a bullish consolidation especially after mid of March. By end of March, there is high priority it will break the resistance level 3292 and test the next major resistance on Monthly at 3432.