Technical analysis view on Saudi Arabia Stock Market (Tadawul) Index known as TASI –

We said back in 12 June 2014 that the Saudi index (TASI) was seen at new highs not seen since May 2008, as it was traded around 9,800 points at that time. We also said that technical indicators were positive with no sign of retrieval showing, and a break above the high at 9,868 points would easily take the index higher to the psychological level at 10,000 points in the near-term period, and maybe further to the 10,200 points resistance level.

Following our analysis some correction occurred down to 9,513 points at the end of June 2014, granting new opportunity for short-term investors to accumulate stocks near 9,650 points level. However, the drop was short lived and the index recovered soon after, crossing above the resistance level at 9,830 points before strongly rising above the 10,000 psychological level. Higher highs were printed during the last five weeks leading the index little above the 11,000 points level for the first time since January 2008 as it ended at 11,029.95 points on 27 August 2014.

Technical indicators are still bullish with no sign of retrieval. New target point will be at 11,500 points and the index is expected to reach there within the short to medium term period.

Investors of all time periods can continue to hold their stocks in the Saudi market, knowing that the cash out for short-term investors will come only at levels lower than 10,240 points. Meanwhile, medium and long term investors can consider cashing out only at levels lower than 9,320 points and 8,180 points, respectively, if the index retreated below those lines.