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Dubai: in range-bound mode

Posted: 12/30/2012 - 1:31 pm

On December 15, we highlighted the 1580-1630 range in the Dubai index (DFMGI) and we said that the downside risk remained high despite a probable rebound from the low-end of the range (read: Dubai: our call for high downside risk remains in place).

Indeed, the market bounced from a brief low of 1575 to the current level of 1616 thereby validating the highlighted range.

With the index approaching the upper end of the zone where resistance was found in the last two months, traders should turn short-term cautious and use the rebound to the 1620-1630 area as an opportunity to reduce exposures.

That said, we draw attention to the rally during the last two to three sessions in some of the weaker stocks in the Dubai market – DFM, DEYAAR, UPP – and acknowledge the positive implications by their price actions. However, we would approach these names with caution and avoid rushing into taking long positions.

Stay on the lookout for our updates on the individual stocks.

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