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Tadawul All Share TASI Index drops below short-term support and is headed lower

list Sep 23, 2014 | Views 932

On Monday the TASI fell below key short-term support at 10,910.90, the low from the most recent swing low. The index dropped 1.23 per cent to close at 10,874.82. That drop follows three attempts over the past month to continue higher, and each has failed to sustain the now 12-week uptrend. As of Monday’s low at 10,822.80, the TASI has fallen 3.01% from the 11,159.50 peak hit three weeks ago. 

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In addition to falling below the swing low support, Monday’s decline put the TASI clearly below its 20-day exponential moving average (ema) on a daily closing basis for the first time since July 1st.  Together, these two signals point to a deeper pull back. Let’s look at several potential support zones. Each is noted by the shaded area in the enclosed daily chart. 

The first is around the area of the 50-day ema (purple), which is now at 10,658.58. Support may be seen around that ema, but there is also a six-day consolidation zone nearby from approximately 10,641.6 to 10,547.0. That potential support zone is followed by 10,192.1 to around 10,177.0, and is derived from prior weekly support and resistance levels. This is followed by the more significant support zone starting from around 9,934.0 to 9,833. That’s the top of a basing pattern which stalled the ascent of the TASI for six weeks back in June/July. More significant because it identified resistance, now potential support, for a period of time.(www.marketstoday.net)

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