Rally in Dubai, Abu Dhabi indices traps bear operators

Thursday, Jul 13, 2017

Dubai:

Bulls were having an upper hand in the last four sessions on Dubai bourse as traders accumulated selective stocks ahead of key second quarter results, catching bears by surprise.

The Dubai Financial Market General Index closed 1.23 per cent higher at 3,537.42, witnessing more strength after the index breached the 20-50 day moving average.

“Yellen is talking about a gradual increase in Fed funds rate, people are pushing back on the next hike, which is positive for equities. We had good results from the UNB, which could be an acquisition target,” said Sanyalaksna Manibhandu, director Research, National Bank of Abu Dhabi Securities.

The Dubai index is headed towards the immediate resistance at 3,573 and then target 3,850 in the coming months, said Shiv Prakash, senior analyst with National Bank of Abu Dhabi Securities in a note.

Gradual buying that was triggered by Emaar Properties on June 7 started to gain steam with the index breaching key technical barriers.

In stock specific action, Dubai Islamic Bank closed 0.52 per cent higher at Dh5.75. Emaar Properties closed 1 per cent higher at Dh7.94. Traders may look to hold and add further with stops placed under Dh7.72, said Prakash.

Damac Properties closed more than 4 per cent higher at Dh4.01. Dubai Financial Market’s share was up 2.56 per cent at Dh1.20.

DFM stock may witness fresh buying if it breaches the level of Dh1.21, and may target Dh1.33 in the near term, said Prakash, adding Dubai Investment is poised to target Dh2.33 in the short term.

The Abu Dhabi index also surged more than 2 per cent on the back of buying in etisalat and First Abu Dhabi Bank.

The Abu Dhabi index closed 2.46 per cent higher at 4.518.07.

The index has formed a double bottom at 4,350 and has crossed over the 50-day moving average. Analysts say the index may hit 4,580 in the short term.

Etisalat closed 2.54 per cent higher at Dh18.20. “Traders may look to enter etisalat for a target of Dh18.30/18.90 in the medium term,” said Prakash.

Uncertainty:

“I think that there is a lot of uncertainty in terms of crude oil. We need good results to sustain this buying next week. That will be good to offset any macro concerns,” Manibhandu said.

Abu Dhabi Commercial Bank is scheduled to publish their results on July 20, while Dubai Islamic Bank and Emirates NBD will publish their results on July 19.

By Siddesh Suresh Mayenkar Senior Reporter

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