Abu Dhabi General Index (ADX)

Closing price in previous report: 4067.03 Current Level: 4301.91 (+5.7%)

Observations on the daily chart: In the May 2020 report, the index looked likely to trade sideways with resistance at 4250. A short rally took prices above this level in the month of June, this up-move came to a quick end at 4400. This indicates that the index continues to trade in a supply zone (4250 to 4400). The moving averages suggest that prices are in a sideways trend with an upwards bias.

Observations on the momentum oscillator: The momentum indicator confirms a sideways trend and shows weakness in the movement of index prices.

Summary: The long term trend on the index is down and the short term trend on the index is sideways with an upward bias. The momentum is flat, which reflects weakness at higher prices. The index currently trades in a resistance area between 4250 and 4400 and has support in the area of 3700 and 4000. The index may continue to trade sideways before the next move. A continuation of the upward move in prices could rally the index to 4700. In a bearish scenario, the index falls below the 50 day moving average and selling pressure could drag prices lower to 3700. Trades should be placed only after a trend is confirmed rather than attempting to preempt a market direction, which usually results in being trapped in the wrong side of a trade.

It is possible that the trend may reverse suddenly, strict stop-losses should be maintained.

Important price points in July 2020:

Resistance levels: 4400 (+2.3% from current level), 4700 (+9.2% from current level)

Support levels: 4000 (-6.96% from current level), 3700 (-13.97% from current level)