The Saudi Stock Exchange’s main index, TASI, is attempting to recover during trading on Wednesday, after rising to near 10,875 points, achieving gains of approximately 0.75%. However, the technical picture still indicates a continuation of the downward trend in the medium term, amid warnings that any current rise may not exceed being a temporary technical rebound unless key resistance levels are broken.
This comes at a time when investors increasingly need advanced analytical tools to help read market movements more accurately, which is what the WarrenAI platform, available within the InvestingPro subscription, provides. It combines technical analysis, fundamental data, and artificial intelligence to deliver trading scenarios supported by dozens of technical indicators and support and resistance levels, giving the investor a more comprehensive view before making buy or sell decisions.
The platform relies on real-time analysis of price movements, momentum, and technical trends, providing potential entry and exit levels, as well as assessing the strength of different scenarios and their likelihood of success. This makes it an advanced tool for investors and traders who want to make data-driven decisions rather than relying on impressions or psychological factors.
The overall trend remains downward despite the current rebound.
According to WarrenAI's analysis, the general index is still moving within a clear downtrend on the daily timeframe, trading below the key 20, 50 and 200-day moving averages, and remains below the Ichimoku cloud, which are technical signals reflecting the continued dominance of sellers over the overall market trend.
The analysis indicates that the index's trading near 10874.6 points puts it below the first significant resistance zone located between 11000 and 11050 points, meaning that any rise at the moment is viewed as a corrective move within a downtrend, and not the beginning of a new upward wave, unless the index succeeds in breaking through this zone and closing above it.
The WarrenAI platform provides such an analysis automatically, as it not only displays technical indicators, but also interprets and links them to clarify whether the current movement represents a real change in direction or just a temporary rebound, which helps the investor to avoid entering into trades against the main trend.
Technical indicators suggest a possible rebound... but with caution.
Despite the overall trend remaining negative, technical analysis has identified several signs that may support a short-term rebound in the coming sessions.
The index recorded a Hammer candlestick formation near the bottom, a technical pattern that reflects the market's rejection of lower price levels and often indicates buyers' attempt to regain control.
The Relative Strength Index (RSI) is also approaching the 33.5 level, which is close to the oversold zone, increasing the likelihood of a technical reversal, especially as the index touches the lower boundary of the Bollinger Bands, which statistically means that prices have become excessively low compared to their usual movement.
However, WarrenAI’s analysis indicates that these positive signals still lack confirmation, as the SuperTrend indicator is still giving a sell signal near the 11008 point level, while trading continues below the Ichimoku cloud and moving averages, and trading volumes during the recent rebound were below average, reflecting the weak strength of buyers so far.
Key levels that may determine the next direction
The platform's analysis suggests that the area between 10756 and 10786 points represents the most important current support levels for the index.
This area is of exceptional importance because it coincides with the 61.8% Fibonacci retracement level of the previous upward movement, in addition to being a pivotal bottom area that may determine the fate of the trend during the next stage.
If this zone is broken and the daily close is below it, the chances of resuming the downward trend will increase significantly, with the possibility of targeting levels of 10410 points initially, and then 10200 points if the selling pressures continue.
On the other hand, the 10920 point area stands out as an initial resistance, but it is not enough on its own to change the overall trend.
While the area between 11000 and 11050 points represents the main obstacle to any upward attempt, as several technical resistances converge there at the same time, including the SuperTrend indicator and the 20 and 50-day moving averages, as well as being an important psychological level for traders.
Two main scenarios for the index's movement
According to WarrenAI’s assessment, the most likely scenario remains a continuation of the downward trend, especially if the index loses support at 10,750 points with a clear daily close.
In this scenario, the analysis predicts that the downward wave will extend towards 10410 points and then 10200 points, with the Relative Strength Index remaining below 50 and the ADX index rising above 25, which are signals that confirm the strength of the downward trend.
On the other hand, the upward rebound scenario remains, but it carries a lower degree of confidence.
This scenario requires the index to successfully break above the Hammer candle peak and then close above 10920 points, while the true breakout remains dependent on recovering the 11008-11050 point area, followed by holding above the 20-day moving average.
If this happens, the correction may extend towards 11250 points, then 11450 points, but the analysis emphasizes that these moves will remain corrective unless the technical structure of the trend changes completely.
What does this reading mean for the investor?
WarrenAI’s reading indicates that the current phase requires a greater degree of discipline in risk management, as the market stands at critical levels that may determine its direction over the coming weeks.
For speculators, the area between 10750 and 10800 points remains the most important, as holding it could provide an opportunity for a technical rebound, while breaking it would reinforce the negative scenario.
As for the medium- and long-term investor, the technical environment still requires caution, given the continued trading below the 200-day moving average and the Ichimoku cloud, indicators that suggest the downward trend is still dominant so far.
