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It’s all good

Posted: 12/30/2013 - 9:25 am

On December 24, we highlighted the sideways price action in the Dubai Financial Market General Index (DFMGI) and we said that the breather the market seemed to be taking was hardly a call to exit.

Our bias remained to the long side despite the nearing of a potential correction. Bearish signs remained absent and our view was to stay long and focus on protecting the gains by increasing the protective stops (read: Here is what you do…).

The targets on almost all of the trades we have taken in the past two months were left open to take advantage of the rally and we see no reason to change the strategy at this point.

As for yesterday’s sell-off, we view it as a healthy pull-back within a solid uptrend.

As we mentioned in our last note, it would not be surprising to see investors, regional and international, to lock in some gains ahead of the closing of the year but the nature of the selling we are seeing is not enough to sound the exit alarms.
Yesterday’s pull-back was confined to the small-caps while the heavyweights held on fair well. Heck, Abu Dhabi ended strong backed by the heavyweight banks.

Abu Dhabi National Bank led the rally and hit our target of 13.50 and appears to offer further upside after lagging its peers by a wide margin (read: On the UAE Banks).

In short, we see no reason to call for an exit as of yet and we suggest that you stay put.

Below is a snapshot of our open trades along with the updated protective stops:

Dubai Islamic Bank: Bought at 4.39 on November 24 with an open target.
The stop is adjusted to 5.20.

Emaar: Bought at 6.23 on November 24 with an open target.
The stop is adjusted to 7.34.

Dubai Investments: Bought at 2.20 on November 24 with an open target.
The stop is maintained at 2.34.

Union Properties: Bought at 1.03 on December 4 with an open target.
The stop is maintained at 1.13.

Aldar Properties: Bought at 2.50 on December 8 with an initial target of 2.65.
The stop is adjusted to 2.65.

Deyaar: Bought at 0.770 on December 10 with an open target.
The stop is adjusted to 0.972.

Tabreed: Bought at 2.40 on December 10 with an open target.
The stop is maintained at 2.36.

Arabtec: Bought at 2.78 on December 16 with an open target.
The stop is adjusted to 2.78.

Dubai Financial Market: Bought at 2.27 on December 16 with an open target.
The stop is maintained at 2.25.

Gulf Navigation: Bought at 0.37 on December 22 with an open target.
The stop is adjusted to 0.415.

AirArabia: Bought at 1.53 on December 26 with an open target.
The stop is maintained at 1.46.

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