Riyadh - Mubasher: The main index of the Saudi Stock Exchange is within the profit taking wave after bypassing the descending triangle, with six months of horizontal movement in a narrow range, according to a recent report by Aljazira Capital.
The news of the inclusion of the Saudi market index in the watch list of emerging markets index (MSCI) last June, was the most important news in support of the breakthrough the horizontal pattern, the report indicated.
The research firm said that there is a possibility that the positive oil price movement could form an important support for the index over the next period, amidst the growth in semi-annual profits of the Saudi market at the end of the second quarter of 2017.
“It is likely that, under the current technical indicators, the profit taking in the index will end at 7,080 levels, 61.8% of the last upward wave, including completion of the ascending movement again to the expected levels at 7,750 points.
“Furthermore, the Relative Strength Index (RSI) index was able to exceed 50 levels with the break of the previous horizontal track, while the weekly moving averages are positively intertwined, which may contribute to increase purchasing pressure during the coming period,” the report noted.
According to Aljazira Capital, the outlook remains positive over the medium term after bypass the previously mentioned horizontal path. With current profit taking likely to end around the 7,080 points level and return to complete the main upward trend towards the resistance levels for the next period at 7,290 to 7,750 points, respectively.
The Saudi Stock Exchange (Tadawul) saw a negative performance in July, as the Tadawul All Shares Index (TASI) lost 4.5% or 331.5 points, and reached the level of 7,097.17 points by the end of July 2017.
The market capital declined by 4.6% or SAR 81 billion, reaching SAR 1.68 trillion ($448.7 billion) compared to SAR 1.76 trillion ($470 billion) by the end of the previous month.
Traded values amounted to SAR 60.5 billion in July compared to SAR 54.7 billion in June, increasing by 10.6%, while traded volumes went up to 2.91 billion shares up from 2.90 billion shares last month.
