Last week, the Dubai Financial Market General Index (DFMGI) ended 13.65 or 0.83 per cent higher to close at 1,651.90. Market breadth was mixed with 16 advancing and 13 declining issues, while volume remained near the lows of the past several months. The DFMGI broke down out of a small symmetrical triangle consolidation pattern two weeks ago. Shortly thereafter the index found support at 1,617.30. It then bounced up into resistance of the lower uptrend line previously defining the bottom of this consolidation pattern, before turning back down last week. So far this is classic bearish price behaviour that follows a downside breakout of a price pattern. However, that price action has now created a larger symmetrical triangle consolidation pattern when using the new swing low of 1,617.30 to redraw the lower uptrend line across support of the consolidation phase. In other words, it looks like the pattern has evolved into a larger similar pattern. We\'ll now have to watch for a new breakout signal from this larger pattern. These types of patterns have a tendency to accelerate to the upside or downside depending on which direction price moves out of the pattern. Given that this eight-week consolidation phase has occurred after a strong rally (from mid-January), is forming above a long-term downtrend line, instead of below it, and has kept the DFMGI clearly above its 200 daily exponential moving average (ema) long-term trend indicator, the odds still favour a move higher. However, the direction that price breaks out will be needed to confirm the next direction. Price is getting closer to the apex of the triangle pattern, where the two converging lines used to identify support and resistance meet. Usually a breakout of a pattern such as this will occur before price reaches the apex. This means that the odds favour a breakout in one direction or the other within the next one to two weeks. A move below 1,617.30 signals a downside breakout, with the index then targeting support around 1,591.84. By taking the high to low distance of the triangle pattern we can arrive at a probable downside target based on the pattern. In this case, the target is approximately 1,502. That is a bit lower than the target discussed in previous weeks relative to the smaller earlier triangle pattern. In addition to the triangle target, there are several other price levels where the index could find either short-term or long-term support, and include 1,543, 1,536, 1,502, and 1,479. The lower price area is most significant . The first time an upside breakout will first be indicated is on a move above 1,684.76. Confirmation of further strengthening will then be needed above 1,706.60, followed by 1,729.51. If the DFMGI can then get above 1,778.25 a trend continuation signal will be confirmed with another leg up likely. The Abu Dhabi Securities Exchange General Index (ADI) improved by 7.68 or 0.31 per cent week to close at 2,507.90. Volume was mediocre so far reflecting the lack of investor enthusiasm to enter the Abu Dhabi market at these price levels. Market breadth was mixed with 22 advancing and 16 declining issues. It looks like the ADI might bounce a little higher before turning back down again. Resistance (prior support) is around 2,528.40, the 200ema on the daily chart, and 2,535.67, support of the double top reversal pattern discussed in previous weeks. There are several technical indications that would support a further decline in the ADI over the coming weeks or couple months. After the January rally off the 2,294.34 low, the ADI found significant resistance at the bottom of a long-term trend line. Subsequently a double top reversal pattern was formed, which is where a second attempt is made to reach a new high but fails, thereby creating two highs. A breakdown and therefore bearish confirmation of this pattern occurred below 2,535.67. The pattern can be used to measure out a potential target. In this case, the target for the double top is approximately 2,428.64. This potential support area is very close to 2,426.80, the 61.8 per cent Fibonacci retracement ratio measurement. Together these two price levels create an important potential zone of support, if the market eventually gets down that low. Also, previous support and resistance was at 2,417 to 2,412.50. On the upside, a move above weekly resistance at 2,560.79 would need to be seen before the odds improve that the ADI could continue higher from there. At that point, the ADI would be back above its 200ema, and begin to negate the bearish implications of the double top. Any pattern breakout can fail to follow-through as anticipated and should always be anticipated. Gulf Navigation has now retraced almost 50 per cent of its rally after hitting a high at Dh0.429, and has been sitting at support of the 200ema. This stock needs to stay above Dh0.31 to have a chance of going higher in the foreseeable future. Short-term resistance is at Dh0.33. A similar situation has occurred in Islamic Arab Insurance Company where the recent low of Dh0.70 hit the 200ema and has started to bounce. The price pattern developing in the Dubai Financial Market has similarities to the DFMGI. An upside breakout would now be indicated above Dh1.18, and a downside breakout signalled below Dh1.11.