In our last month article, we ended our analysis of Middle
East Stock Markets with the following questions: “Will the bullishness
sentiment sustain and penetrate the monthly timeframe to allow Middle East
markets to enjoy a bullish market? Or is this enhancement temporary and just a
major pullback trying to continue its previous direction to go bearish again?”.
The answer is that the Middle East Markets were going
through a major pullback that took six months to be completed. It was a
temporary bullish that helped the market to recover for couple of months. However,
there is low probability it will continue bearish. The major pullback was paving
for the market to recover in the long run. It is the transition from bearish to
bullish. There is a high probably that it will get into new stage of
consolidation for the upcoming weeks to start changing the monthly sentiment to
bullish. To support our analysis, we will use three different approaches:
iChimoku Heatmap, Color Code Aggregation and Charts.
We will start with the iChimoku Heatmap graph that is generated
from our website. It shows the higher timeframes sentiment of Middle East stock
markets for the past months. We will concentrate on the daily and weekly
timeframes and exclude the monthly since it is a short period.
According to the above, the major pullback started in
January and ended in August. Both months have almost the same color codes (Red
and Amber) that covering most of the table. The middle tables show the
bullishness. In Feb, the green cells covered all daily timeframes and change
the status of the weekly paving the way for the next month. In April, the green
cells penetrate the weekly and trying to reach the monthly timeframes. In July,
Daily and Weekly timeframes are completely green with few exceptions.
The second approach is the color code aggregation graph
shown below. It shows number of Green cells vs Red cells over the past months. You
can clearly see that the green cells were higher in March, April and July. Red
cells took control in Jan and August.
Our last approach is the charts. The following are screen
shot of Weekly timeframe for some of the Middle East Markets to show the major
pullback occurred.
Figure 7: eSignal Weekly Chart of Dubai
Financial Market
Figure 7: eSignal Weekly Chart of Kuwait
Financial Market
Figure 7: eSignal Weekly Chart of Oman
Financial Market
In conclusion, the Middle East Markets had a major pullback
that ended in August 2016. There is a low probability that these markets will
go bearish again with the same steepness. The upcoming months will be a
consolidation phase. The consolidation might continue till begging of next year.
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