Monday, Nov 30, 2009

 
   By Francis Bray, CFTe MSTA 
   A DOW JONES NEWSWIRES COLUMN 
 

LONDON (Dow Jones)--The Dubai Financial Market General Index has been under heavy bear pressure since setting a 2009 high around 2750 in October, and there is increasing evidence that the index is set for more weakness as the dominant bear trend comes back to the fore.

The general index of Dubai's publicly-held companies has broken down through pivotal support around the 2000 level to set a fresh closing low for November at 1940.36 Monday, its biggest one-day fall in 13 months. This cements October's peak around 2750 as a significant high, with the index managing a meager 32.5% retracement of the dominant 15-month decline off the all-time high in the 6910 area, and confirms the November ll high around 2390 as a lower high.

Former support around 2000/2100 now reverts to resistance, and there is room for a deeper setback towards an equality target around the 1740 area (coinciding with an approximate 50% retracement of the 750/2750 none-month advance).

However, given the increase in pace of the current decline, scope for the 1.618 Fibonacci extension target around 1340 cannot be ruled out, and this area coincides with the July 2009 higher low. Bulls will be keen to keep this 1340 area intact to protect against a more serious setback, but given the extremely weak level of retracement to the approximate 2750 high in October, there appears to be little significant support ahead of the February 2009 cluster of lows around 750.

Corrective rallies should be limited to the 2000/2100 area, and only above here would there be questions about the severe bearish outlook and room for further corrective gains towards the 2390 lower high.

(Francis Bray is Dow Jones' chief technical analyst for Europe, and has worked as a technical analyst and trader for 20 years in London, Barcelona and Guernsey. He can be reached at +44 (0)20 7842 9249; or by email: francis.bray@dowjones.com)

For more technical analysis see: Dow Jones Newswires, N/DJTA; Bloomberg, NI DJTA; and Reuters key word search "INSI-DJN"

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Data provided by CQG International Ltd.

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(END) Dow Jones Newswires

30-11-09 1147GMT