Dubai Islamic Bank Breaks Down From Head & Shoulders Top
Bruce Powers | Dec 14, 2014 02:35AM ET
Dubai Islamic Bank (DU:DISB), traded in Dubai, has made a clear drop from a Head & Shoulders Top (HS) trend reversal pattern. The breakout occurred as the stock fell below approximately 7.00, which is where the neckline and 200-day exponential moving average (ema), another trend indicator, coincide. Volume picked up to reach the second highest level of the past seven weeks.
Frequently, when a trend line and moving average identify the same area of price support or resistance, movement through the price level results in an acceleration of price momentum. That was the case here.
The initial breakdown actually occurred last week, and was confirmed this week with DISB falling 14.23%, ending at 6.09.
Given the bearish breakout of the HS and drop below the 200-day ema (for the first time since March 2013, other than a very small breach for a short time in October) DISB can be anticipated to fall further. Any rebound from here, up into resistance around 6.76-6.80, if it occurs, presents a new opportunity to exit existing positions at higher prices.
Based on the HS pattern, the minimum target for DISB is around 5.25. There is a higher potential support zone around 5.59 as well. Lower targets include 4.26 (prior resistance peak), and 3.80 (top of a multi month base from 2013). (www.marketstoday.net)
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