Stock Market Report for 20 Mehr 1405: Three Scenarios for the Bourse, Continued Growth, Fluctuation, or Correction?

In Monday morning's trading, 20 Mehr 1405, the capital market rose alongside gains in the Bourse and Farabourse indices. This trend, along with rising key indicators, draws traders' attention to the sustainability of demand and the possibility of continued upward momentum.

According to the information recorded at 10:05, the total index of the Tehran Stock Exchange reached 8,287,241 units with an increase of 44,374 units. The total equal weight index also increased by 9,391 units and reached the level of 2,174,610 units.

According to the report of Ambassador Arjan, at the same time, the total OTC index increased by 198 points and reached 65 thousand and 92 points. The market value of the Tehran Stock Exchange was reported to be about 240 million billion Rials and the value of transactions recorded in this market was more than 182 thousand billion Rials. In OTC, the value of transactions reached more than 126,000 billion Rials and the number of transactions exceeded 321,000.

technical analysis of the stock market; Total index in the range of 8.2 million units

From a technical point of view, the total index of the stock market is in the range of 8 million and 287 thousand units, and to evaluate the continuation of its path, the behavior of the index in higher and lower ranges should be checked. The growth of more than 44,000 index units in the early trading hours is not enough to confirm the stabilization of the upward trend; Because the direction of market movement in the continuation of trading and how the index reacts to resistance levels are very important.

In the current situation, maintaining the level of the index in the range above 8 million and 250 thousand units can help to continue the positive atmosphere of the market from a psychological point of view. On the other hand, the pullback of the index and the loss of this range increases the necessity of examining lower supports. These levels are approximate ranges for monitoring indicator behavior and not definitive supports and resistances extracted from the daily chart.

On the other hand, the passing of the index from the range of 8,300,000 units can be considered as one of the important points to check the power of buyers in the continuation of transactions. However, the stabilization above this range and increasing demand in various market symbols is important to assess the validity of the upward movement.

What is the message of equal weight index for shareholders?

The growth of the total weighted index, along with the increase of the total index of the stock market, is one of the variables that should be considered in the evaluation of the market situation. The total index is more affected by the changes of large and higher weighted companies, while the equal weighted index reflects the changes of companies with a more equal weight.

Therefore, the simultaneous increase of these two indicators can be a sign of the association of some of the smaller and medium symbols with the overall movement of the market. However, to draw conclusions about the extent of demand, the number of positive and negative symbols and the value of stock trades should also be examined.

If the growth of the weighted index is accompanied by the increase in the number of positive symbols and the strengthening of the value of small transactions, a clearer picture of the expansion of demand in the market can be obtained. On the other hand, if the market's growth is mainly limited to a few large symbols, the increase in the overall index will not necessarily mean that all stocks will improve.

transaction value; An important variable for measuring the quality of stock market growth

The value of transactions registered in the Tehran Stock Exchange has reached more than 182 thousand billion Rials. This figure, along with the volume of transactions, provides important information about the amount of transactions carried out in the market; But to recognize the real strength of the upward trend, it is necessary to determine the share of small stock transactions from the total transactions.

The increase in indices will have a stronger trading support when it is accompanied by growth in the value of retail trades, increased demand and wider participation of symbols. Otherwise, it is not possible to draw conclusions about the inflow of fresh money or the sustained strengthening of liquidity in the market based solely on rising indicators.

In the over-the-counter market, the registration of more than 321,000 transactions and the transaction value of 126,000 billion Rials shows a significant amount of trading activity. However, it is necessary to compare these figures with previous days to recognize the real increase or decrease in trader activity.

According to the available data, three general scenarios can be considered for the continuation of transactions:

The first scenario; Continued growth: If the total index can remain in the current range and cross the range of 8.300 thousand units, along with increased demand and wider participation of symbols, the possibility of continued upward movement will be strengthened.

the second scenario; Fluctuation in the current range: If the power of buyers and sellers reaches a balance, the index can fluctuate in the current range. In this situation, the behavior of large symbols, the equal weight index and the value of small trades will be important to identify the next direction of the market.

the third scenario; Modification of the index: If the selling pressure increases and the index loses the range of 8 million and 250 thousand units, the possibility of further retreat and testing of lower levels is raised. Confirmation of this scenario requires an examination of the chart and trading data later in the day.

In general, the growth of stock and over-the-counter indices in the first hour of trading provides a positive picture of the current market situation; However, evaluating the stability of this trend depends on the behavior of the indicators during the trading, the extent of demand and changes in the value of small transactions.