The Dubai Financial Market General Index (DFMGI) continued its decline last week having reached the 1,519.49 to 1,512.59 support zone, which includes the 50 per cent retracement of the uptrend begun from the early March 2011 low. On Tuesday, the low of this zone was breached followed by a minor bounce and close back into the zone. It\'s possible, but not assured, that this support zone will hold in the short term and a bounce could be seen from here. Volume increased on Wednesday\'s session, which was an up day. A break above minor resistance at 1,531.24 is the first signs of strengthening. For the week, the DFMGI fell 20.55 or 1.34 per cent to close at 1,516.93. Volume also fell, but given the shortened trading week, not much of an indicator. Market breadth continued to be bearish with 26 declining issues versus four advancing. The DFMGI has now closed below the 1,519.49 support level signalling a continuation of the downtrend started 10 weeks ago. This means that even though the index may have a short bounce from here, it\'s likely thereafter to continue lower. The odds still favour a decline down to at least the 61.8 per cent Fibonacci retracement level of the March 2011 uptrend, which would put it around 1,473.44. Article continues below Important long term support levels remain at 1,455.01 and 1,428.09, the low from July 2010 and early February 2009, respectively. Other than second quarter earnings reports, there\'s not much of a catalyst coming to help drive the market higher as we move into the slower summer months and upcoming holiday period. So far, the 10-week downtrend from the April 2011 high has been orderly, well constructed, and should be considered normal. However, if selling momentum accelerates and the DFMGI drops below the 61.8 per cent level, then the medium turn outlook turns bearish. Of course, a decline to below the lower long term support level of 1,428.09 increases the probability that the index will fall below the low of the year. It\'s important to keep in mind that the long-term trend remains down, and is aligned with the medium- and short-term trends. Given recent price action, the long term trend will remain down until the DFMGI closes above its recent high of 1,691.64. On a fundamental basis, the Dubai Market remains one of the best values worldwide. But, it is not just fundamentals driving price in the short and medium term. Investor sentiment also effects supply and demand of shares and therefore prices. Abu Dhabi Overall, the construction of the Abu Dhabi Securities Exchange General Index (ADI) trend characteristics, that can be seen in its price chart, is stronger than the DFMGI. This doesn\'t mean that the index will not continue lower, just that the recovery could be stronger once the pullback is complete. Last week, the ADI declined 12.53 or 0.46 per cent to close at 2,704.19. Volume was lower while 28 declining issues beat advancing of nine. The close of the week was near the low indicating further declines in the short term are possible. Support for the week was found in the area of the 38.2 per cent Fibonacci retracement level (2,707.04) of the uptrend measured from the late May 2011 low, and the 200 period exponential moving average (ema) (2,696.23), a long term trend indicator, on the weekly chart. It\'s possible a short bounce could be seen from here, but there are no signs of it. The odds now favour a decline to the more significant potential support area of the downtrend line, which identifies the top of the correction begun from the October 2010 high. A rally in the near term is likely to be met by further selling that puts the ADI closer to that line. There are several indications of potential support above the line, from 2,680.41, the 38.2 per cent Fibonacci retracement level of the uptrend begun from the March low, down to 2,663.79, the 61.8 per cent retracement level of the uptrend measured from the May low. In between that support zone is 2,674.17, the 200ema on the daily chart. Alternatively, the ADI could decline all the way down to the area of the uptrend line. This would indicate greater weakness overall and therefore a rally could take longer to develop. Stocks to watch Aramex is approaching support of Dh1.74. A close below that level signals a likely decline to support around Dh1.68. Abu Dhabi Commercial Bank remains one of the strongest stocks in the market having broken out an approximate two and a half year bottom chart formation 10 weeks ago. The stock found support on Wednesday at its medium term downtrend line and may see a bit of a bounce from here. If the market continues to selloff a deeper retracement may be seen possibly down to support around Dh2.74. However, once the market completes its current pullback and turns back up, Abu Dhabi Commercial Bank could continue to be a leader. Dubai Islamic Bank is approaching support at Dh1.99. A close below that level indicates further downside is likely, at least to Dh1.90.