Tadawul All Share Index (TASI) continues to weaken following breakdown from rising wedge

Following a breakdown from a bearish rising wedge several weeks ago, the TASI (Saudi Arabia stock market) seen three consecutive weeks of falling prices. The index is now fast approaching the first key support zone to watch for a potential short-term bounce. Typically, at some point following a breakdown a bearish pattern a counter-trend rally will occur back up towards the breakdown zone (approx. 7,226) to some degree, before a continuation lower kicks in.

Monthly Chart – Tadawul All Share Index (TASI)

The next potential support zone to watch is around the 38.2% Fibonacci retracement zone of 7,289.79. You can see that this support zone is reinforced by prior support and resistance as can be seen on the weekly chart below.

Weekly Chart – Tadawul All Share Index (TASI) 

If the 38.2% price zone is exceeded to the downside the TASI next heads towards a price zone from around 6,916 (50% retracement) to 6,710 (prior monthly support). The lower price zone is a key level as it was a low during an eleven-month consolidation zone from 2017 and is part of the larger developing uptrend begun off the October 2016 lows. Nevertheless, if exceeded to the downside the TASI next heads towards the 61.8% Fibonacci retracement of 6,540.43.