Stock market weekly forecast / Does the market continue to be red?

According to Tejarat News, the total index of the stock market last Wednesday was at 1,439,000 units, and this week it reached 1,412,000 units, recording a smaller drop of 1.88%.

Sara Fallah, a capital market analyst, said in a conversation with Tejarat News: “This week’s stock market was very low compared to previous weeks.” The lack of liquidity is still evident in the market. The main feature of this week’s transactions was the superiority of small and medium industries in the market compared to large industries.

He continued: Last week, the total index dropped by more than 2%; But the equal weight index did not change significantly.

Referring to the reason for the lack of changes in the equal weight index, this capital market expert said: the lack of cash flow cannot affect large stocks. Still, many people did not enter the market due to the vagueness of the political environment and the unclear status of the JCPOA, and they prefer to be observers rather than active in the market.

Fallah further explained: The second reason is the global drop in commodity prices and the prospect of recession in most of them. Due to the severe contractionary policy of the Federal Reserve, the dollar index has reached its highest level in the last few decades. Due to this issue, the global prices of most commodities will enter the decline phase and a recession will be formed in the entire world economy.

The outlook of export-oriented industries

He continued: As a result of this issue, our large industries, most of which are export-oriented, were damaged, and there is no clear perspective of high sales prices in the reports of these companies.

This capital market analyst pointed to the next reason and said: The behavior of lawyers is the next big reason. In the same week, we saw the sale and cascading supply of some rights in the large shares, which did not give the opportunity for growth to the large shares.

Fallah explained: The market value of these shares is large and they have high buoyancy. These shares are not actor-oriented, and in terms of reading the legal board, they are in charge of directing the share. Now, for any logical or illogical reason, they don’t want to raise the price of large shares. Current cash flow goes from one industry to another.

He stated: This week, paper products were of interest; Because the world price of paper was rising due to the lack of energy in Europe and the cessation of wood and pulp exports by Russia. Some shares of Kashi Group were able to increase their rates.

This market expert predicted that, of course, it is expected that other products of this group will also have a rate increase. After the sharp growth in global prices of detergent raw materials over the past few months, these prices have entered a downward correction phase for some time, and this price reduction for the detergent group can be of interest.

Fallah said: As a result of the news within the industry, it was another reason for the market to pay attention to small and medium stocks. Of course, not all shares of this industry were lucky, but the shares that experienced a large price drop and have a good fundamental condition and have a good track record are currently leading the market.

He stated: Therefore, we can say that in this phase of the market, the role of analysis has become more prominent and the market has given more weight to the reports.

Stock forecast next week

Fallah said: The dominant trend in the overall market is downward and the market is thirsty and waiting for an important news. An important news in Eshel Clan, which can be political news and economic openings, or government support for the capital market, or anything else that brings the parked money into the market.

This capital market expert continued: With the current situation, we do not expect such news for next week. Therefore, we predict that the overall situation of the market will be relatively bearish and balanced, and we still envision a better situation for small and medium market shares with good fundamental conditions.

Technical analysis of the total index

He stated: The medium-term trend of the total index is downward. The peaks are recorded one after the other below. The pattern that can be seen in the total index is the contraction triangle pattern that was formed correctly. This pattern can also be broken from the top side of the triangle.

Fallah said: Today, the defeat was done from the floor, although the defeat has not been established yet. But the same pattern can be seen in the RSI and the breakout from the bottom of the triangle has been done in the RSI. Therefore, we predict that the total index will have a pullback to the broken area and after that it will fall to its first target, which is the price range of 1350 thousand units.