ESE loses LE 17.5 bn in 3 trading sessions over election results

The Egyptian Stock Exchange (ESE) lost in the past three trading sessions up to LE 17.5 billion over the results of the first round of presidential election.

Also, the benchmark EGX 30 index lost 1.1 percent to reach 4,683.87 points. The broader EGX 70 index of the leading smaller and mid cap enterprises (SME) dropped 1.2 percent registering 409.58 points. All embracing EGX 100 index also lost 2.09 percent to reach 735.28 points.

In its daily report on The Egyptian Exchange (EGX), Pharos Research maintained its intermediate-term bullish outlook for EGX30 as long as the index keeps trading above the 4500 level, which corresponds to 4500 in the Hermes Last Index (HRMSL).

The report issuer indicated that the upper panel of the chart to the right demonstrates that HRMSL, which trimmed its losses yesterday, closing above its preceding day’s low.

According to Pharos, such daily trading action took the shape of a Hammer-like formation, which gives a hint that buying power began to appear in the market, and a minor rebound is imminent.

When the index rebounds, it will likely face resistance near the downward sloping trend line – nearly at 4975 for the EGX30 Index (lower panel) – which has been lately serving as a moving resistance.

What boosts such scenario is that yesterday’s buying action was driven by the heavyweight constituents of the EGX30 Index, namely OCI, CIB, ORTE and OTMT.