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KFH: strong bullish trend takes DFM index to highest level

KFH: strong bullish trend takes DFM index to highest level
In our last analysis back in March on Dubai Financial Market General Index known as DFM Index, we said that the index was able to continue its strong up rise and crossed over the first and second resistance levels that it was facing at 4,000 points and 4,120 points, respectively, It then faced a new resistance at its highest level since September 2008 at 4,255.19 point, which was reached on February 18th.

Some profit booking was seen near the five and a half year high level, causing some draw back in the index during the first week of March and taking the index down to its 76.4% level of Fibonacci retracement near 4,020 points.

However, as the strong technical indicators remain intact, and following the recent healthy correction, trading activity increased again as investors went buying at lower prices, and pushed back the index to above the resistance levels at 4,370 points and 4,690 points. The index continued to record new highs, and reached a high not seen since August 2008 after breaking above the 5,000 points psychological level before the end of the week.

DFM ended April 24th at 5,088.48 points. However, technical indicators are still bullish but at overbought levels. The coming resistance levels occur near 5,240 points, then at 5,500 points, respectively.

Investors can continue holding their stocks as long as the index is maintaining its bullish trend. The first support now exists at 4,320 points and below that short-term investors should start cashing out. Medium-term and long-term investors can hold their investment as long as the index is traded above 3,350 points and 2,530 points, respectively.