The index succeeded in completing the bearish head & shoulders pattern which we mentioned before with the neckline at 1040.00; the index breached the neckline though lacked the downside momentum to reach the targets in addition to the strength of the 38.2% correction which was strong support against the decline pushing the index higher but did not exceed the top for the right shoulder at 1129.00.
The index is attacking the neckline again to reactivate the bearishness which momentum indicators are again entering negativity supporting the 1040.00 support once again and might restrict the breach and increase fluctuations around this area. In general, we see steady trading below the breached support for the ascending channel and attacking 1040.00 is enough to push the index to expand the bearishness to continue the medium term bearishness which halted at 61.8% with the recorded top at 1216.50 and accordingly the downside movement is to control the index for the coming period targeting 1016.00 and then far ahead at 881.00 where this scenario requires steady daily closing below 1125.00.
By: Yasir Mubarak
Senior Technical Analyst