10/01/2015 04:55 AST
The Dubai index may gain further after rebounding in the previous two sessions as steady crude oil adds to investor confidence.
The Dubai Financial Market General Index rose as much as 3,739.91, a level last seen on December 31, before closing 2.05 per cent higher at 3,674.29.
“The closing of the first week of the year is much better than first two sessions. This will give a lot of hope and heart to many people for January. It was a good day for DFM on Thursday.
What we are seeing is that volatility is happening within the trading sessions. We are having buying and selling within the trading sessions and market is able to absorb those in its mechanism,” said Mohammad Ali Yasin, managing director at NBAD Securities.
The Dubai index was the best performing market until early December, but gave away almost all gains at one point, only to end the year 12.69 per cent higher.
“What is encouraging is that this positive tone has started when we had lower crude oil and lower close in the US, and that is very encouraging and I believe that value in our markets is extremely very high,” said Yasin.
Oil prices headed for a seventh straight weekly loss on Friday.
Global oil benchmarks hit their lowest since 2009 this week and are down more than 50 per cent from June levels, with Brent crude futures extending declines on Friday, dropping 50 cents a barrel to $50.46 by 0927 GMT.
US crude futures for February delivery were down 12 cents at $48.67 a barrel.
Analysts expect Dubai index to gain further.
“I see new targets for next week. DFM might hit resistance area around 4,000 and consider it to be low risk at current levels. May be the risk would start again if it goes below support level 3,470,” said Osama Al Ashri, member of British organisation, Society of Technical Analysts.
The Dubai index would trade in 3,350-3,800 range in the short-term, said Yasin.
New target for ADX
“We saw positive trading on ADX as well, but ADX trading between important support and resistance area, it succeeds to hit resistance level 4,755, this will lead to new target above 5,000 again and may record new high for 2015. The risk may start again if it goes down support area in 4,178,” said Al Ashri.
Abu Dhabi Securities Exchange General Index ended 1.22 er cent higher at 4,478.76 on Thursday.
Aldar Properties ended 0.41 per cent higher at Dh2.450, while Bank of Sharjah ended 3.16 per cent lower at Dh1.96.
“I advise to buy Aldar Properties at these levels with a short term target of Dh2.81, and may approach resistance level of Dh3.44 in this quarter. I advise to buy Bank of Sharjah with a medium term target of Dh2.27 during this quarter,” said Al Ashri.
“I still advise to keep Waha Capital and it may hit new up target of Dh3.49. I advise to keep Dubai Investment Company, which may hit a new target of Dh2.80 by March. Gulf Finance House looks oversold on charts, and may hit a new resistance,” said Al Ashri.
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