Price Projections Using Pattern Matching (Week 40)

Below are this week's index price projections based on the pattern matching approach presented in this previous post.

Here's a summary table which provides a 5-day outlook based on the price projections for each GCC index:

The price projections on the charts below extend for twenty trading days into the future.  However, in the table above we're only looking at what the price projections are telling us about the next five days. 

For each index there are three 5-day price projections based on the three best historical price matches.  For example, the best historical match for the DFM General Index was higher five trading days later (Best Match 1 = "Up"), as was the second best match. However, the thrid best match was lower five trading days later (Best Match 3 = "Down").

The "5-Day Outlook" column provides the average 5-day price change of the three best historical matches. For the DFM General Index the average 5-day outlook is 0.65%.

As you can see, the price projection based outlooks broadly confirm what we're seeing in the other weekly analysis reports (Trend Analysis, Index Analysis & Market Breadth).  That is, most projections are pointing to higher index levels this week.

Enjoy.

Weekly Market Breadth Analysis (Week 40)

Good news.  All GCC markets are now displaying positive market breadth.  Historically, this has provided a bullish outlook for the GCC markets.

To find out exactly how bullish each individual GCC market has performed during positive market breadth periods please see this previous post.

Enjoy.

Weekly GCC Index Analysis (Week 40)

The only notable change from last week's Index Analysis is that the outlook for the Muscat 30 Index has now turned Bullish.  The outlook for all other GCC indices remains the same which is good news because apart from the ADX Index all have a Bullish outlook.

Enjoy.

Weekly GCC Trend Analysis (Week 40)

No changes in the trend conditions from last week. Most markets remain in either a Bullish or Very Bullish state.

Enjoy.

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Notes:
1. In the  "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages.  The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long)

3.  The "Outlook" value can be "Very Bullish," "Bullish," "Neutral," "Bearish" or "Very Bearish."  The value is determined by the historical performance of the index when the same short, medium and long-term trend conditions were in evidence in the past.

4. The top chart shows a plot of the historical price performance of the index.  Highlighted on the chart are the past periods when the current trend conditions were in evidence in the past

5.  The bottom chart shows the non-compounded percentage returns of the index when the current trend condition were in evidence in the past. 

Weekly Market Breadth Analysis (Week 39)

The market breadth analysis remains the same as last week.  All GCC markets except for Bahrain are currently experiencing positive market breadth and, therefore, have a bullish market outlook.  Bahrain's market breadth breadth remains negative, but less so than last week.

Enjoy.

DFM General Index: 9 Higher Closes in the Last 10 Trading Sessions

Monday's DFM General Index close was the ninth higher close out of the last ten trading sessions. The chart below shows the previous 138 occurrences of nine out of ten higher closes.

As you can see, most of the previous occurrences were in 2004 and 2005.  Recently, however, there have been fewer and fewer instances.

Historically, the DFM General Index has closed higher five trading sessions later 64% of the time following days when nine of the last ten trading sessions yielded nine higher closes.  The average gain was 0.70%.

When the market did closer higher five days later it do so by an average of 1.76%.  When is closed lower it lost an average of -1.22%.

In conclusion, when the DFM General Index has closed higher for nine of the last ten trading sessions this has been broadly positive for the market over the next five trading sessions.  It certainly hasn't foreshadowed any significant market sell-off in the week following such occurrences. 

Enjoy

Weekly GCC Index Analysis (Week 39)

No notable changes from last week.  Aside from the Muscat 30 Index all other indices are now trading above their 20, 50 and 100-day moving averages.

Enjoy.

Weekly GCC Trend Analysis (Week 39)

In a shortened holiday trading week for the GCC markets the only changes to last week's trend outlook is the move from Neutral to Very Bullish for both the ADX Index and the Muscat 30 Index.  The outlook for all other indices remains the same.

Enjoy.

Notes:
1. In the  "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages.  The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long).

3.  The "Outlook" value can be "Very Bullish," "Bullish," "Neutral," "Bearish" or "Very Bearish."  The value is determined by the historical performance of the index when the same short, medium and long-term trend conditions were in evidence in the past.

4. The top chart shows a plot of the historical price performance of the index.  Highlighted on the chart are the past periods when the current trend conditions were in evidence in the past

5.  The bottom chart shows the non-compounded percentage returns of the index when the current trend condition were in evidence in the past.