Last week, the Dubai Financial Market General Index (DFMGI) fell 4.59 or 0.34 per cent to close at 1,348.80. Given the shortened trading week, volume was near the low for the past 12 months, while market breadth was close to even with 14 advancing and 12 declining issues. Momentum on both the weekly and daily time frames has started to point to the possibility of higher prices. However, there\'s no confirmation of strengthening until the DFMGI moves higher and starts closing above potential price resistance levels. The first level to watch is near-term weekly resistance at 1,357.23, followed by weekly resistance around 1,382. If the index can stay above the higher price level then it will also be above the downtrend line, as seen on the accompanying chart. The downtrend line marks dynamic resistance of the eight-month bearish trend. A close above it will be another sign the trend is starting to change, either leading to a reversal, or range-bound sideways action that could develop into a bottoming price pattern over time. It\'s also possible the price action creates a continuation pattern of the downtrend, and eventually continues to decline. The first real sign that the index may be starting to complete a bottom pattern for the medium-term is on a close above 1,413.76. Further and more significant confirmation of strengthening will be indicated on a close above resistance at 1,426.28. Short-term, weakening is signalled on trade below 1,329, while important long-term support remains at 1,317.92, the low from 2011 and a seven-year low. Abu Dhabi The Abu Dhabi Securities Exchange General Index (ADI) declined 3.52 or 0.15 per cent last week to close at 2,398.76. Volume was low given the holiday week, while market breadth was bearish with 17 declining issues and only seven advancing. What\'s important to note is that selling resistance was found at 2,417.03 last week, right at the downtrend line of the six-month trend. The ADI turned down from there on Thursday. That high now marks an important short-term price level where a close above would signal additional strengthening. Until then the six-month downtrend remains in place with a pull-back lower in the short-term likely. Key support remains at 2,337.69, the low for 2011. As long as the index stays above that price level there\'s a chance it could turn higher or start a relatively sideways consolidation phase. As with the DFMGI, downside momentum has been weakening. But, the odds continue to favour a continuation of the downtrend until a close above 2,417.03, as the structure of the trend remains in place as indicated by resistance being at the downtrend line last week. If the ADI does manage to rise above 2,417.03 then we would next need to see a close above the weekly high at 2,467.85 before additional strengthening is signalled. Stocks to watch Hits Telecom was the top performer in the Dubai market closing 7.71 per cent higher for the week and putting this stock again above its 200 daily exponential moving average (ema), a long-term trend indicator. Its price chart pattern remains bullish, with further strengthening signalled on a break above the recent high of Dh0.75. Support is around Dh0.65, with trade below a bearish sign. Aramex has been mentioned a few times in this column over the past couple months as being a stock that is holding up relatively well compared to the larger market. Although it has so far failed to breakout higher, it continues to consolidate within a relatively well defined range above and below its 200ema. Each attempt to rally over the past couple months has been met with selling pressure turning the stock back down. However, subsequent to each decline support was found at a higher price level than previously, thereby creating an upward sloping trend across the bottom of the consolidation pattern. This is bullish behaviour. The top of the consolidation phase is at Dh1.89 with a close above that level signalling a possible breakout, which could lead to higher prices. I say possible, as a breakout can always fail and investors need to be on the lookout for such a failure - in all cases. A more speculative situation may be developing in Shuaa Capital that could lead to a bounce, particularly if the larger market gets stronger. It\'s dropped over 40 per cent since falling through key long-term support of Dh0.85 back in September 2011. A new low of Dh0.466 was hit on Thursday intraday before the stock closed at Dh0.50. Fibonacci ratio analysis derived from previous trends identifies potential support around Dh0.47. So far this stock has recognized that area, as it\'s been hit the past two weeks and has held so far. Some sign of strengthening still needs to be seen before there is an indication that Shuaa could rise from this potential support area. The first sign of strength is seen on a close above weekly resistance of Dh0.55. A more important indication that a bounce could keep going is seen on a close above Dh0.608. Bruce Powers, CMT, is a financial consultant, trader and educator based in Dubai, he can be reached at [email protected] Stock market investments are risky and past performance does not guarantee future results. Gulf News does not accept any liability for the results of any action taken on the basis of the above information.