Tadawul All Share Index Finishes 6th Consecutive Week Of Gains
Bruce Powers | Dec 04, 2016 03:16AM ET
The Tadawul All Share (Saudi Stock Exchange) finishes its sixth consecutive week of gains, up 4.7% to close at 7,117.61. Since hitting a low of 5,327.49 nine weeks ago the TASI has risen as much as 33.6% as of last week’s high at 7,117.61, even as oil prices had previously come under pressure. Its determine descent has plowed through all potential resistance levels on the way up with hardly a pause, while volume has stayed strong the past four weeks.
This is the strongest move given, when looking at the range and speed of the move for the index, since topping out in 2014, and so far the second largest advance since that top. The largest rally was 37.2% but it took 20 weeks.
Last week a bullish breakout of a relatively large double bottom trend reversal pattern was triggered on a move above 6,875.69. Given that the index closed the week near the high of the week and noticeably above the breakout level, the breakout is decisive. A classic double bottom measure indicates an eventual target of 8,423.89. However, that’s a long-term target and even if the index does eventually get there it could take some time given the size of the double bottom pattern.
Next targets:
- 7,226 : prior support & resistance
- 7,517 –7,579 : 200-week exponential moving average (ema) and 38.2% Fibonacci retracement of full downtrend, respectively.
- 8,244 : 50% retracement of full downtrend
- 8,424 : Double Bottom minimum target
- 8,932 : 61.8% Fibonacci retracement + prior weekly support & resistance
The TASI has been overbought for the past several weeks according to the 14-period Relative Strength Index (RSI) as its continued higher, but has not quite reached overbought on the weekly. This indicates that the next target of 7,226 at a minimum may be reached before a noticeable retracement occurs.
On retracements watch for support around the double top breakout level at 6,876, and then the 55-week ema around 6,652. Further down is the 200-day ema currently at 6,435.
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