EGX sees decline in purchasing power, weakening chances to shatter 10,310 point resistance

Alyaa Stohy
2 Min Read

The Egyptian Exchange (EGX) suffers from a clear decline in purchasing power, which weakens the chances of rising above the resistance level 10,310 points again, and confirming its breach upwards.

The benchmark index EGX30 is expected to continue rising during the coming week’s early sessions, to re-penetrate the resistance level of 10,310 points again. This is also set to confirm its breach to the top in search of new resistance levels.

Mohamed Othman, Head of Technical Analysis at Pharos Holding, highlighted the weak performance of buying power on the EGX, after its failure to surpass the 10,310 point resistance level during four successive sessions.

“The consistency of trading below the level of 10,310 points increases the likelihood of witnessing further selling pressure where the next support level lies at 10,000 points,” he said, “On the other hand, in case of a clear breach above the latest peak at 10,325 points, this would trigger a new bullish signal.” 

Othman advised investors to reduce the margin at any rebounding attempt, and to carefully monitor the protective stop levels for each stock separately.

The EGX30 closed at 10,256.62 points, recording a decline of 0.22%, whilst the EGX70 EWI posted a 0.25% loss concluding the period at 2,323.01 points. Meanwhile, the S&P index declined by 1.98%, and concluded the period at 1,739.75 points.

The EGX30 capped declined by 0.5% to conclude at 12,813.25 points, while the EGX100 EWI index declined by 0.55% and concluded the period at 3,278.77 points.

Total market capitalisation reached EGP 667.3bn at the end of the period, representing an increase of 2.43% over the last week.

The total value traded recorded EGP 12.1bn, while the total volume traded reached 1,838 million securities executed over 189,000 transactions last week.

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