CAIRO: The Egyptian Exchange (EGX) ended in the green Wednesday amid sideways performance, getting support from a foreign trader buying spree a day after two mega projects were launched in the Suez Canal zone.
The benchmark index EGX30 managed to shoot above its new 6-year high above the 9,000-point barrier, edging up 0.41 percent to end at 9,047 points, compared to 9,010 points Tuesday.
The small and mid-cap index EGX70 ended on a slight 0.17 percent increase after reducing morning losses to end at 629 points, compared to 628 points Tuesday, and the broader index EGX100 also added 0.42 percent to reach 1,119 points.
Market capitalization gained around 600 million EGP ($83.9 million), registering 506.8 billion EGP, up from 506.2 billion EGP last session.
“The benchmark index traded sideways today and moved in a narrow range but managed to make a new high with less volume compared to last session,” Osama Naguib, head of technical analysis at Arab Finance, told The Cairo Post.
“Although a new high has been created, technical indicators didn’t witness a new high which means that there is a near-term negative divergence between the index and the indicators, which by default means a correction is on the way,” Naguib said.
He added that blue chips rose and are still targeting higher areas, reflecting their dominant buying power and its impact on key stocks.
“So if a correction takes place we expect a slight decline—no more than around 8,800-points—in order for the market to gain more power preparing to target between 9,200-9,300 points,” the analyst predicted.
Ahmed Abdel Rahman, Chief technical analyst at Helwan Securities and board member of Helwan Holding told The Cairo Post that most technical indicators show signs of short-term sell-offs, although the benchmark maintained its level above 9,000 points.
“A downward correction could boost the market uptrend as long as the benchmark remains above 8,820 points,” added Abdel Rahman.
In turn, El-Mokattam Securities Brokerage technical analyst Walid Helal had expected the benchmark to end in the green but with limited gains.
“EGX30 performance remains positive and the market indicators show a tendency to resume the upward movement targeting 9,200 points,” Helal said.
He added that the coming sessions would witness minimal profit taking, giving a chance for purchasing power to enter the market.