UAE indices rebound with short-term bull run seen

23/02/2016 06:23 AST

The Dubai and Abu Dhabi indices rebounded on Monday, re-testing January levels following strong leads from crude oil, even as analysts expected a short-term recovery in the bourses. The Dubai Financial Market General Index (DFMGI) closed 2.47 per cent higher at 3,170.27, after hitting a high of 3,170.27, a level last seen in early January.

“[The] market has today broken its resistance and has reversed its downtrend, we are now in a short-term bull market and expect a 10 per cent rally from here. The rest of the week should continue to be positive, especially that global markets opened in the green and oil is showing some stability and could surprise to the upside,” said Hesham Khairy, head of Institutional Trading at Menacorp.

Oil extended gains on Monday, as a fall in US oil-drilling rig numbers lifted the prospect of lower crude production while a bounce in stock markets encouraged buying sentiment.

Brent crude was up more than 3 per cent, adding to gains registered last week. Global stock markets were also higher due to strong commodity prices.

On the Dubai bourse, Gulf Finance House (GFH) closed more than 8 per cent higher at Dh0.70, while Amlak Finance ended more than 7.5 per cent higher at Dh1.37.

“Bullish close at the high of the day hints further upside in Gulf Finance House and the stock may advance to target Dh0.89/0.94 in the medium term,” National Bank of Abu Dhabi (NBAD) Securities in a note to its clients. “Traders bought near the recommended level at Dh0.54 and 0.60 may look to hold and add further while trailing the stops higher to Dh0.60 level.”

Arabtec ended 1.71 per cent higher at Dh1.19, extending gains for another session. “There are hints of further upside in Arabtec, and the stock might hit Dh1.23/1.28/1.34 in the short term. ?The double-bottom reversal pattern is formed at Dh1.04 on the daily and hourly time frames. Traders may look to buy keeping Dh1.10 as the trailing stop-loss,” NBAD Securities in a note.

Dubai Investments closed 5.46 per cent higher at Dh1.93 while Dubai Islamic Bank closed at Dh6.24, up 3.65 per cent. Out of a total of 36 stocks in trade, the stocks of 32 companies advanced while those of three retreated.

The Abu Dhabi Securities Exchange General Index closed 2.1 per cent higher at 4,297.19. “The recovery from the support level of 4,050 extended the gains,” the NBAD Securities note stated. “The near-term trend has turned bullish with the next target seen at 4,313 level. Traders may look to hold selective stocks while placing the stop below the 4050 level.”

In stock-specific action, Eshraq Properties closed more than 3 per cent higher at Dh0.65. Dana Gas closed 4.8 per cent higher at Dh0.51 while RAK Properties closed more than 5 per cent to end the day’s session at Dh0.62.

“Overall Eshraq Properties is poised for another bullish break-out and that shall ignite recoveries to hit the previous high at Dh0.70 in the short term.

Traders who bought near the lower recommended levels may look to trail the stop loss higher at Dh0.58 now,” the NBAD Securities note adds. Out of a total of 32 stocks traded on the exchange, the shares of 22 firms advanced while those of six retreated.

Gulfnews