Saudi Arabia Stock Market - Sept 2016

As always, we will start with an overview about latest updates on the Middle East financial markets and then we will take a deep look into the Saudi Arabia financial market. The reason for selecting Saudi Arabia Market this month is because of the recent news about financial pressures on the Saudi government. The government decided to implement the contractionary policy and cutting the government expenses that started with the salaries of Saudi Ministers and state workers. We will analyze the stock market to see how it will react to these events and to determine the next support and resistance levels that the market will respect.

In general, Middle East Financial Markets are consolidating over the past month. There is no much changes occurred since last month for most of the markets. However, there are some markets like Saudi Arabia and Qatar are doing worse than last month. The following tables show the progress of the Higher Timeframe over the past three months. 

  

As for Saudi Arabia, It is currently sitting on major support at 5345. All Higher timeframe are bearish bushing the market to break that support. Since January 2016, the monthly timeframe was pushing the market to go up against the weekly which had a strong bearishness sentiment over the past months. Now, the monthly has no more strength to push the market up and handing over the control to weekly and daily. 

In the upcoming two weeks (from 29^th of Sept till 9^th of Oct), the daily timeframe has strong bearishness sentiment that will push the market to break the support. If it doesn’t break the support within the first two weeks, there is a small window till end of Oct 2016 for the market to go higher to the next resistance which is 5832. Subsequent to that, the weekly will start gradually pushing down till end of the year. Despite the shortness of the daily bearishness sentiment (two weeks only), it is stronger than the weekly. The weekly bearishness is not that strong; however it will last till end of this year. 

If the daily or weekly succeed in breaking the current major support at 5368, there is high probability that the market will be heading to 4358. The following graph shows the daily timeframe and next supports and resistances.

Figure 2: eSignal Daily Chart of Saudi Arabia Financial Market

In conclusion, Saudi Arabia Financial Market has a bearishness sentiment that being pushed down by daily and weekly timeframe. It is currently facing a major support level. If it holds that support for the first two weeks of Oct, there will be a buy opportunity till end of the Oct.