Selling pressure threatens further decline in EGX to 11,500 points this week

Alyaa Stohy
3 Min Read

The Egyptian Exchange (EGX) has been facing selling pressure on the big caps and is expected to continue during this week’s trading until positive news appears that pushes the index to re-target the resistance area of ​​12,000 points.

The benchmark index EGX30 closed at 11,731.71 points, recording a decline of 2.34% last week. The EGX70 EWI posted 1.14% loss, concluding the week at 2,208.76 points, and the S&P index declined by 1.88% and concluded the period at 1,897.1 points.

The EGX30 capped also declined by 2.38% and concluded at 13,919.86 points, while the EGX100 EWI decreased by 1.39% and concluded the period at 3,231.96 points.

Mohamed Othman, the Head of the Technical Analysis Department at Al Ahly Pharos Holding, said the market is currently examining the key support level at 11,680 points, which represents a previous broken peak that turned into support.

In case of failure to maintain above the latter level, then the downward correction would extend to the next support at 11,500 points, which represents 61.8% of Fibonacci retracement (i.e., from “B” to “C”) compared with the previous upward move (i.e., from “A” to “B”). In this regard, he advises investors to make use of any rebound to sell rallies until a new bullish signal reappears.

Furthermore, total market capitalisation reached EGP 756.9bn last week, representing a decrease of 1.49%.

The total value traded recorded EGP 23.8bn, while the total volume traded reached 1.326 billion securities executed over 154,000 transactions last week.

Stocks trading accounted for 14.52% of the total value traded of the main market, while the remaining 85.48% were captured by bonds over the week.

Egyptians represented 72.1% of the value traded in listed stocks after excluding deals during the last week. Foreigners accounted for 17.2%, while Arabs captured 10.7%. Foreigners were net sellers, with a net of EGP 85.5m. Arabs were net sellers, with a net of EGP 134.1m after excluding deals in listed stocks.

Since the beginning of the year, Egyptians represented 77.2% of the value traded in listed stocks after excluding deals, foreigners accounted for 13.4%, while Arabs captured 9.4%.

Foreigners were net sellers by EGP 390.3m and Arabs were net buyers by EGP 21.9m after excluding deals in listed stocks during this year.

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