The Dubai Financial Market General Index (DFMGI) bounced 2.28 per cent last week to close at 1,686.50. Market breadth was relatively even with 13 advancing issues and 18 declining. This is not surprising given that the index remains within a price consolidation phase. Volume improved slightly, above the prior couple weeks. Last week the DFMGI did break above resistance at 1,691.16, the high of the prior couple of weeks. It\'s possible the bullish move last week could be the beginning of another run higher, but so far there\'s not enough evidence indicating it can keep going in the near future. The index did not close near the top of the weekly range and it closed below that weekly resistance. In other words, even though the index traded above resistance of 1,691.16, it became resistance again by the close of the week. Near-term support is now at the weekly low of 1,637.41. A break below that price level will be the first sign that the DFMGI is weakening and that it could decline further. A move down towards the low of the prior six weeks at 1,591.84 is then possible. Until the index trades below 1,591.84 it remains range bound up to resistance at 1,778.25. The DFMGI broke above a long-term trend line (begun from the October 2010 swing high) seven weeks ago, and has since stayed above it. Prior to the breakout the line represented resistance. It now represents support. That trend line price support area was ‘tested\' during the decline five weeks ago when the index bounced off 1,591.84. This was almost an exact match with support of the trend line. The process of the index first breaking above the long-term trend line and then recognising it as support by touching the line and bouncing, is considered bullish price behaviour for the medium-term. That bullish behaviour is strengthened by the fact that the DFMGI continues to trade above that line. However, short-term trade below 1,591.84 increases the likelihood the DFMGI will move into a deeper retracement of the 2012 rally. Lower support is from around 1,543 to 1,535. That price zone includes the 50 per cent retracement level of the rally. A further decline from there could see the DFMGI then decline down to the next support zone from 1,479 to 1,458.70. Trade above last week\'s resistance at 1,706.60 will give the next sign that the DFMGI is strengthening. The question then is, will it have enough strength from buyers to push it through the recent high at 1,778.25, which would confirm a continuation of the uptrend and likely lead to even higher prices. Abu Dhabi Last week the Abu Dhabi Securities Exchange General Index (ADI) was essentially flat having only improved by 5.98 or 0.23 per cent. The index closed at 2,558.98 and volume remained low. Market breadth confirmed the uncertainty as to the next direction, also reflected in the very low weekly trading range, with 18 advancing and 21 declining issues. The index traded sideways with very little volatility last week. It did not break weekly support at 2,549.47 from two weeks ago, which would have signalled a decline to five-week support at 2,535.67. A decline to below 2,535.67 would trigger a bearish breakout of a double top chart formation which frequently occurs at the top of a trend and signals a trend reversal. This pattern consists of the 2012 rally high at 2,642.65, and the subsequent lower high of 2,640.54 reached after the ADI bounced off 2,535.67 support. The significance of the 2,535.67 support area of the double top pattern is strengthened as the 200 exponential moving average (ema) is close by at 2,531. This means that a breakout of the double top would also likely put the index back below the 200ema, a long-term trend indicator. Each would be a sign that the ADI can drop further. The more significant support zone at that point would be from approximately 2,428.68 (double top target) to 2,426.80. A higher, but slightly less significant support level is at 2,509, and another around 2,472. For signs of strengthening watch for a move above weekly resistance at 2,587.56. At that point the odds improve that the ADI could make another attempt to break above the 2,642.65 resistance area, and negate the bearish double top pattern. A decisive break above that price level will have the DFMGI heading towards the 2,673 price resistance area. Stocks to watch Dana Gas has been consolidating along with the market up against resistance of its long-term downtrend. A decisive break above resistance at Dh0.53 is needed for a bullish signal, while trade below Dh0.45 support signals lower prices. National Bank of Abu Dhabi is holding near a three-year high indicative of long-term strength, compared to many of the listings. A close above Dh9.19 resistance signals strengthening which could see this stock then move higher. Arabtec Holding improved by 17 per cent last week closing at Dh3.44. It made an attempt to break above the recent rally high at Dh3.75, before finding resistance lower at Dh3.70. This is the type of price behaviour indicative of a strong leading stock. It remains to be seen whether it can continue higher, above Dh3.75 resistance, in the near-term. Bruce Powers, CMT, is a financial consultant, trader and educator based in Dubai, he can be reached at [email protected] Disclaimer: 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.