EGX 30 the stock market’s benchmark index closed the session Monday at the level of 5,288 points, 0.29 per cent down from Sunday’s closure.
The market’s indices started the session with a brief upward movement before turning red. It was expected to continue the positive performance triggered by the referendum on the draft constitution, held Saturday in 10 governorates, while Egyptians abroad continue to vote till Monday.
Ihab Saeed, director of the Technical Analysis Division of Osool ESB Securities Brokerage said he had different expectations, ” I anticipated the market to rise a little bit, then to begin a downward movement, the leading stocks; Orascom Constructions Industries (OCI), Orascom Telecom and Commercial International Bank (CIB) have reached their resistance levels and they are bound to retreat under selling pressures.”
Saeed described the prevailing trend as a “sideways movement that tends to retreat,” confirming that global performance is positive, despite the fact that EGX 30 is not likely to breach the 5400 resistance level soon, “the index has to cool down, waiting for the final outcome of the referendum.” The analyst outlined that a “Yes” vote will be better for the market, provided that it will not be widely challenged, “when the referendum is done, and if everything is calm, we can expect a movement up.”
Regarding the NSGB deal, Saeed said it negatively impacted the stock’s price, as it was expected to have a higher value, “even if the price was logical, the holders expected the stock to be sold at EGP 50 to 55, when it was sold at EGP 55 they panicked, which contributed to selling pressures.”
Mohab Ageena, head of technical analysis at Beltone Financial said the market started ascending even before the referendum, while the Presidential Palace clashes were happening; political events have a temporary effect that is rapidly absorbed by the market. He expects the worst case scenario, for the main index not to break the 4900 points support level in the short to medium term, with the best case being not to surpass the 5500-5650 points resistance level, adding that this sideways movement is normally accompanied by low transaction volumes.