EGX expects calm, test of previous 10,700 points resistance

Alyaa Stohy
3 Min Read
A general view of the Egyptian Exchange (EGX) in Cairo August 18, 2013. Egypt's stock market fell sharply on Sunday as it resumed trading after hundreds of people were killed in a crackdown by the army-backed government on supporters of the Muslim Brotherhood. Banks and the stock market reopened for the first time since Wednesday's carnage, with shares rapidly falling 2.5 percent. REUTERS/Louafi Larbi (EGYPT - Tags: POLITICS CIVIL UNREST BUSINESS)

Financial market experts expect that the Egyptian Exchange (EGX) will witness quiet movements this week, with the benchmark index EGX30 heading to rise towards the resistance level of 10,700 points.

Mohammed Othman, Head of Technical Analysis Department at Pharos Holding, sees that the EGX30 is heading currently to test the previous peak, which lies at the resistance level of 10,710 points. 

Technical indicators are showing positive signals that support the bullish breakout scenario on the near term.

He added that a clear break above the latter level is associated with relatively higher volumes and an improvement in the market, which would pave the way for the market to reach 10,935 points.

Meanwhile, the consistency of trading above the 10,400 points support level, which follows the resumption of upward movement, remains high.

“Short term traders are advised to be selective, taking into consideration the risk tolerance for each stock, while placing their stops below 10,400 points,” Othman added.

Last week, the EGX30 closed at 10,767.84 points, recording an increase of 1.7%. Meanwhile, the EGX70 EWI index posted a 1.46% gain, concluding the period at 2,161.97 points, while the S&P index rose by 1.37% to conclude the period at 1,708.38 points.

The EGX30 Capped rose by 1.93% to conclude at 13,047.42 points, while the EGX100 EWI index rose by 1.51% and concluded the period at 3,096.77 points. 

Total market capitalisation reached EGP 672.2bn at the end of the period, representing an increase of 2.01% over the last week, with securities executed over 107,000 transactions last week. 

For the week before last, the total value traded recorded EGP 10.0bn, while the total volume traded reached 1,148 million securities executed over 103,000 transactions. 

Stocks trading accounted for 24.84% of the total value traded of the main market, while the remaining 75.16% were captured by bonds over the last week.

Egyptians represented 81.6% of the value traded in listed stocks after excluding deals during the period. Foreigners accounted for 11.9%, while Arabs captured 6.5%. 

Foreigners were net sellers, with a net of EGP 203.5m, and Arabs were net buyers, with a net of EGP 117.1m, after excluding deals in listed stocks. 

Since the beginning of the year, Egyptians represented 83.0% of the value traded in listed stocks after excluding deals, Foreigners accounted for 10.3%, while Arabs captured 6.7%. 

Foreigners were net sellers by EGP 927.4m, and Arabs were net buyers by EGP 699.2m, after excluding deals in listed stocks during this year. 

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