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

Middle East Stock Markets – Qatar

Comparing to the last month, Middle East Stock Markets are bearish. The level of bearishness varies across the countries but Bahrain and Saudi have the most bearishness sentiment. Qatar and Oman are the most bullish markets. The following graphical views show the strategies of all timeframes for Gulf Region Markets for March and Feb 2016. They help us to identify the sentiment 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 March 2016

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

Figure 2: IchimokuTrade RT Scanner: Middle East Markets Heat Map for Feb 2016

Last month, the bullishness sentiment (Green Cells) covered almost all lower timeframes, swing and Daily. It affected also the weekly and monthly timeframe to be neutral and to start shifting from bearish to bullish. However, the green cells were reduced drastically in March 2016. Almost all timeframes covered with either red or amber, which means that Middle East markets started to reverse and go down. The best markets for bullish opportunities are Qatar according to figure no. 1.

Since Qatar is the most bullishness market, let’s go and have close look at it using our ichimoku analysis. The following graph shows the monthly timeframe.

Figure 3: eSignal Monthly Chart of Qatar Financial Market

Over the past four months, the market was consolidating between 10440 and 9480.  It went down all the way to 8331 in January 2016 but did not close at that level. It came back to close above 9480, which is a signal of strong support. Now it is facing a resistance, and there is high probability to break it since it is not multiple timeframe resistance and will go to test the next resistance at 11333. The probability of reaching that level will increase in May and June.

As for the weekly, there are two small windows to support the monthly timeframe to go to the next resistance. The first window started in middle of March and will end by last week of April. The second window is June 2016.  The bearish sentiment will increase in May pushing down the weekly timeframe to go down against the monthly. Weekly timeframe is now the controlling timeframe, whatever the weekly decides to do, will affect the destiny of the market. The following are the weekly timeframe graph

Figure 4: eSignal Weekly Chart of Qatar Market

In conclusion, weekly timeframe is the controlling timeframe. Whatever happens to the weekly, it will decide the market destiny. The market is currently consolidating between 10440 and 9480. There is a conflict between monthly and weekly especially in May. Therefore, there is a high probability that it will continue consolidating till end of May 2016. In June, weekly and monthly will be aligned supporting the market to go up to the next weekly resistance at 11205.

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.