Profit-taking process permeates EGX’s performance

Mohamed Ahmed
3 Min Read
The Egyptian stock market indices continued to drop for the fourth consecutive day, reportedly affected by the Greek economic crisis, the drop in China’s capital market and domestic fears of militant attacks. (DNE File / Mohamed Omar)

Technical analysts predicted that the Egyptian Exchange (EGX) will complete profit-taking processes on Sunday but with minimum rates. This was after Thursday’s trading session, which witnessed a strong profit-taking process following the spike that followed the Central Bank of Egypt’s (CBE) decision to float the Egyptian pound.

They also expect that the EGX30 will move between 8,750-8,900 points, and will move during this week’s trading between 8,500-9,200 points.

These expectations came after EGX30 rose by 8% on Thursday following the flotation of the pound; however, the EGX then underwent a significant profit-taking process that reduced its gains to 3.35%.

Mohamed Al-Assarhead of the technical analysis department for investment in North Africa and the Middle East at the National Bank of Kuwait (NBK), said that the EGX is expected to complete the profit-taking processes initiated by the end of Thursday’s session on Sunday, after the EGX30 index reached 9,200 points. These processes led to the stability of the index at the end of the session with 8,811 points.

The index is expected to move between the level of 8,750-8,900 points on Sunday, and to move between 8,500-9,000 points throughout the week, which is a higher level compared to 8,100-8,500 points last month.

Al-Assar expects the Commercial International Bank’s (CIB) shares to be among the most attractive shares this week, as its shares did not witness profit-taking and moved between EGP 53-58.

He added that Qalaa Holding’s shares are also likely to increase from the level of EGP 0.74 to EGP 0.85 this week.

Al-Assar pointed out that Hermes’ shares faced profit-taking processes on Thursday and closed at EGP 15.60, which gives an indication that the shares could rise to EGP 16 this week.

He added that the performance of companies that export their production and provide revenue in foreign currency was not remarkable among the shares traded in EGX.

Ehab El-Saeed, head of technical analysis at Osool Securities Brokerage Company, expects that the EGX30 is trying to take advantage of the support level of 8,500-8,600 points this week. It is expected that this level will offer good support for the index, and that it may rise to the level of 9,000-9,500 points.

In terms of shares, El-Saeed pointed out that the shares of the CIB achieved its highest level ever at EGP 57.39, before falling back down to EGP 55.4. It is expected to move near the support level of EGP 53.5, then to EGP 57.

He explained that the Talaat Moustafa Group’s (TMG) shares broke through the resistance level of EGP 5.95 to close near the level of EGP 6.20, and will try this week to break the resistance level of EGP 6.20.

The shares of Global Telecom are expected to overcome the resistance level of EGP 5, then near EGP 5.40-5.50 if it succeeds.

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