Stock market experts believe this week’s trading sessions will see a mix of optimism and caution. While the successful offering of Fawry drives the purchasing power up and spreading optimism among investors, the approaching Eid Al-Adha holiday, which will last for a full week, is likely to calm trading during the current week. In addition, the liquidity Fawry is expected to withdraw from the market, and fear of raising interest rates in the coming monetary policy committee meeting pushes investors to be cautious.
Mohamed Osman, head of technical analysis at Pharos Holding, said despite mounting selling pressures under which the EGX30 Index started Wednesday, but successfully pushed the index above its previous explicit support level of 13,377 points.
The benchmark closed at the session’s high of 13,392, forming a bullish reversal candlestick pattern.
He explained that bears failed to keep dragging the Index below our predefined support level of 13,377 – which almost represents the lowest level recorded over the last two months. “Accordingly, we have received a good sign as the monthly closing level stood above a major support level,” he said.
“We have noticed that the market has approached an extreme reading in terms of volatility, according to the Bollinger Band indicator attached to the EGX30 daily chart.”
Osman added that it is also noticed that the Index is biased to revisit the midrange of the Bollinger Band based on the assumption of “mean reversion,” which assumes that prices tend to move and return back to its average price over time.
“In light of the above two readings, the market is likely to witness an impending temporary rebound. Such potential rebound should be perceived as an opportunity to close position held on margin around our predefined resistance levels. This viewpoint will remain intact until the market proves otherwise,” he said.
Othman pointed out that the interim resistance emerges around the level of 13,570, followed by 13,730.
EGX30 index closed at 13,392.47 points, recording a decline of 5.02% over the last month. EGX70 index posted 13.8% loss concluding the period at 520.28 points, while S&P index declined by 4.52% and concluded the period at 2,063.46 points.
EGX30 index capped declined by 6.14% and concluded at 16,309.46 points, while EGX100 index declined by 12.57% and concluded the period at 1,347.02 points.
Total market capitalisation reached EGP 715.1bn at end of period, representing a decrease of 5.42% over the period.
The total value traded recorded EGP 46.3bn, while the total volume traded reached 3,855m securities executed over 333,000 transactions last month.
For the month before, the total value traded recorded EGP 20.2bn, while the total volume traded reached 2,198m securities executed over 283,000 transactions.
Stocks trading accounted for 30.97% of the total value traded of the main market, while the remaining 69.03% were captured by bonds over the month.
And a move to the weekly data of the stock exchange, EGX30 index closed at 13,525.93 points, recording an increase of 0.12%. EGX70 index posted 2.03% loss concluding the period at 522.12 points, while S&P index declined by 1% and concluded the period at 2,088.37 points.
EGX30 index capped declined by 0.42% and concluded at 16,475.45 points, while EGX100 index declined by 1.15% and concluded the period at 1,359.91 points.
Total market capitalization reached EGP 717.6bn at end of period, representing a decrease of 1.06% over the week.
The total value traded recorded EGP 17.1bn, while the total volume traded reached 733 million securities executed over 78,000 transactions last week.
For the week before last, the total value traded recorded EGP 6.4bn, while the total volume traded reached 489 million securities executed over 55,000 transactions.
Stocks trading accounted for 15.41% of the total value traded of the main market, while the remaining 84.59% were captured by bonds over the week.