Chart-in-Focus: Two Banking Stocks Poised For A Similar Kind Of A Breakout

The most recent listing of Dubai Electricity and Water Authority PJSC (DEWA) has been one of the most spectacular ones; it was the second-largest IPO in the region after ARAMCO. This is seen as a major step towards making the Dubai Financial Exchange (DFM) diversified, more liquid, and one of the larger exchanges in the region as more such 8 to 10 such IPOs are in the pipeline over the coming months.  However, as of now, the two sectors; Realty and Banking, dominate the trading list of the exchange in terms of weight and turnover.

This month, we focus on highly liquid two major banking stocks, Emirates NBD Bank (EMIRATESNBD) and Dubai Islamic Bank (DIB). Let us examine their technical setup in more detail.

Both EMIRATESNBD and DIB have seen a very similar formation that of an bullish Ascending Triangle. Such formation is a bullish one and usually resolves with a move on the upside.

EMIRATESNBD has shown a formation of such Bullish Ascending Triangle pattern. Such a formation is seen when the price forms similar tops but rising bottoms and it usually has bullish implications.

The MACD has shown a bullish crossover; it is now bullish and above the signal line. RSI has marked a new 14-period high which is bullish.

I the present pattern resolves on the expected lines, then from the current levels of 15.20, the stock has a potential to return 8.70% and may test the price levels of 16.45 over the coming days.