Stock market weekly forecast / capital market reaction to the dollar rate

According to Tejarat News, the stock market grew by less than one percent in the past week. The total index of the stock market was at the level of one million and 443 thousand units on Wednesday last week, and this week it reached the level of one million and 448 thousand units and registered a growth of 0.35%.

Sara Fallah, a capital market expert, said in a conversation with Tejarat News: Stock market activists started the second half of August with hope. On Saturday, the capital market was green due to the positive news of JCPOA. After the failure to reach an agreement and the continuation of negotiations and the return of clouds of uncertainty over the country’s economy on Monday, the market was able to resist well. That is, there was no specific retreat even in JCPOA groups, which indicates the existence of glimmers of hope in the market. Also, the average of small stock transactions in the last month is in the range of 3 Hamats, so the high stabilization of this number for several consecutive days can be a better sign for the return of the stock market.

He continued: Among the positive events this week was the deposit of 6 thousand billion tomans from the National Development Fund to the Market Stabilization Fund. Because of this, good purchases were made in big symbols, which can be a promising sign for shareholders.

Supply of new cars in the stock market

This capital market analyst explained: The important news of this week was the entry of some Iran Khodro products into the commodity exchange. Last week, we saw the entry of some products of Bahman Khodro to the commodity exchange. This positive event benefits the producer and the consumer and also helps the transparency of the economy.

Fallah stated: According to the law, fixed income funds should allocate about 15% of their liquidity to stocks. Of course, before this it was 10%, but in March 2019, in order to support the market and prevent further decline, they were required to buy 15% of their liquidity. Statistics show that these funds have less than this amount of shares in their portfolio.

He continued: Some of these funds are newly established, but according to the law, they are allowed to make the quorum of their assets within 6 months. The elders believe that they did not meet this quorum due to the reduction of prices in the market and the distribution of cash profit in the assemblies. But what is important for the market operators is the complete supervision of the legislator on the performance of these funds, especially during the times of market correction.

This capital market expert explained: When the stock market suffers from a lack of liquidity, one of the important pillars that comes to the market. These are the same funds, if you look at the past, they were able to get their profits from this market in many cases. It means that supporting the market is in their own interest. But both the funds and the big rights, unfortunately, fall into greed in times of decline.

Regarding the types of greed, he said: We have two types of greed in the markets. One is the greed in this lack of sale that the person feels that the share will see a higher price again. The second case is the greed in not buying, which the investor likes to see the price keep going down and record new support floors and then buy. This is where the law enforcement officers should be persistent and not let the shareholders suffer.

Stock market forecast next week

Fallah said: The news of negotiations will be the most important and effective factor in the next week. Even the dollar retreated in Tehran’s unofficial currency market in Sabzeh Maidan and Afshar Passage and reached 30,000 tomans. This also shows the optimism of the agreement among the traders. If the agreement is made, the capital market, which is clearly lagging behind other markets and is at appreciable prices, will grow well. We expect that smart money will flow to the stock market after reaching an agreement.

In predicting next week’s transactions, he said: Next week we will have balanced and relatively bullish transactions.

Technical analysis of the total index

This capital market expert stated: As we said in the previous weeks, the prevailing trend is currently downward. But after reaching the support area of ​​1,480 to 1,450 thousand units, which coincides with the 38% Fibonacci retracement level, the index underwent an upward correction, contrary to the direction of the main trend. The signs of the reduction of sellers’ power can be seen in the RSI and in the MFI. Both reached the oversaturation level. Makdi bars are also getting shorter, which means less supply. For now, we expect an upward correction to the range of 1,500 to 1,520 thousand units, and then we have to see what the reaction to this area will be.