Modest trading volumes suggest United Arab Emirates stock exchanges may struggle to overcome looming technical resistance levels as the country's upgrade to MSCI's emerging market status nears.
Buying by local retail investors helped Abu Dhabi's benchmark rise 2.5 percent to 5,049 points Monday, while Dubai climbed 1.9 percent to 4,955 points. The markets were led by stocks which will enter MSCI's emerging market index at the end of this week.
But in both cases, overall trading volumes were low, at around a half or less of levels which prevailed during the markets' uptrend in April. That suggests many investors, particularly institutions, remain wary of fresh profit-taking after this year's big gains.
Abu Dhabi faces minor chart resistance at the early May high of 5,109 points and strong resistance on last month's multi-year peak of 5,249 points.
Dubai faces immediate resistance at 5,011 points, the neckline of the minor head and shoulders pattern triggered this month, and strong resistance at this month's multi-year peak of 5,407 points.
Qatar, which MSCI will also upgrade at the end of this week, looks more bullish technically in the immediate term. Its 0.3 percent rise to a new record closing high of 13,393 points on Monday was accompanied by an increase in trading volume.
The global market environment is neutral, with Asian stocks and oil prices moving sideways.