The Egyptian Exchange (EGX) will have to counter with a different set of circumstances this week following its remarkable performance since the flotation of the Egyptian pound earlier this month. Technical analysts said that the slight decline recorded by the EGX in the final hour of Thursday’s session will result in two possible scenarios: the first is the continuation of the fall near the level of 10,700-10,800 points, whereas the second would see the EGX receive purchases to push the EGX30 towards 11,500 points.
Last week witnessed a 4.99% increase in the EGX30 to close at the level of 11,222 points, recording a total trading value worth EGP 11.1bn.
Mohamed El-Assar, head of the technical analysis department in the National Bank of Kuwait (NBK) in North Africa and the Middle East, said that the performance of the market will be determined based on the trend of the EGX30 during Sunday’s session as a result of the decline in the EGX during the last hour of Thursday’s session.
He explained that the first scenario is the EGX moving towards a decrease. In this case, the EGX30 will continue to decline until the level of 10,700-10,800 points during more than one session, and on reaching this level the EGX will change its direction upwards.
El-Assar added that the other scenario is the EGX continuing the increase it began two weeks ago, and it is likely the EGX30 will aim towards the level of 11,500 points.
The head of the technical analysis department and board member of Osool Securities Brokerage Company, Ehab El-Saeed, said he expects the index to face what is known as the “achieved profits gaining process” within the last two weeks, taking the EGX30 back to the level of 10,600-10,800 points.
“This decline, however, will be temporary and is likely to push the EGX towards its peak at the level of 12,000 points,” he noted.
In terms of the performance of shares, El-Saeed advised performing a partial “achieved profits gaining process” with the stock of the Commercial International Bank (CIB) after its failure to stay at a level higher than EGP 70. He expected Hermes’ share to reach EGP 22-23 but also expected a temporary inability to reach that level. Talaat also targets the resistance level of EGP 9-9.3, whereas Global Telecom would test the level of EGP 6.