Middle East Markets – Quarterly Comparison

In this article, we would to show the progress in the Middle East stock markets. We will use the iChimoku Heatmap to compare the first month of each quarter to present the sentiment for the higher timeframe (daily, weekly and monthly) as shown below. 

We can identify several observations from the above graphs. First observation is the gradual increase in the green cells (bullish sentiment) across the tables. At the begging of the 2016, the green cell was only covering the daily timeframe and only portion of the Middle East markets like Kuwait, Dubai, Qatar and Oman. In the 2^nd quarter, the green cells penetrate the weekly timeframe and start to create some balance between the two sentiments. And not only the bullishness reached the weekly, but also affected some of the monthly timeframe to change from bearishness to neutral like Kuwait. The 3^rd quarter is almost fully covered with green across all markets except the monthly timeframe.

The second observation is that Kuwait and Saudi Arabia are considered the worst cases and the market status is deteriorated comparing with last month. On the other hand, Bahrain which was the worst market in terms of performance, now become one of the best.

The question remains: Will the bullishness sentiment sustain and penetrate the monthly timeframe and Middle East will enjoy a bullish market? Or is this enhancement temporary and just a major pullback for the Middle East markets and trying to continue its previous direction to go bearish again?

To sum up, Middle East markets have progress a lot since 2016. The next step is to align the monthly timeframe direction with the daily and weekly. We believe that there is a window for the Middle East markets to continue the progress and enjoy bullishness till Oct 2016, given that the oil prices sustain it levels or higher. In Oct, the bearish sentiment will increase and we will require another detailed analysis to confirm whether the current progress is a major pullback or consolidation toward bullish trend.

Our Expectations were true about Qatar Market ...

Over the last couple of months, we covered Qatar financial markets several times and forecasted the market reaction to the oil price changes. The following graph was posted in March 2016:

Figure 1: eSignal Weekly Chart of Qatar Market for March 2016

Our forecast was true and Qatar market followed the path we have drawn last time. We have predicted a bullishness in April and June and bearishness in May along with the levels. There was a lag of one week between our forecast and actual performance. The changes in these month occurred one week before comparing to our estimation. To give you more insight about the differences, we have attached the following graph that shows the current status of the market (Bars) and the forecasted movement (blue line).

Figure 2: eSignal Weekly Chart of Qatar Market for March 2016

The market was consolidating between 10400 and 9480 levels. There were two windows of opportunity to go bullish. The first window was supposed to start in April, however it decided to go bullish earlier and started in the 4^th week of March. It got back to the resistance level but could not break it. The second window was June 2016. The timing was matching but the bullishness was not strong enough to bring back the market to the same resistance in one month, so it will continue going bullish to hit the resistance. The bearish sentiment increased as expected in May pushing down the prices to go down against the monthly timeframe.

As for the upcoming weeks, there is high probability that the market will continue its current sentiment and go bullish to reach the major resistance at 10440. The monthly timeframe is supporting the weekly to break that resistance. If it breaks it, it will go to the next major resistance at 11212. However the price should get to the new level before October 2016 because the conflict between weekly and monthly will start in October and it might repeat the consolidation pattern. The following graph shows the next resistance level:

Figure 3: eSignal Weekly Chart of Qatar Market for June 2016