Final days of the earnings season in Tehran’s Stock Market are passing while most of the investors are trying to find out what will come out from companies general assemblies and what are the effects of decision made by board members of the companies on the shares.
TEDPIX is the gauge which all market participants are watching closely to find out clues on when another possible rally in the market will start. In this article, we are trying to figure out whether the above factors have an effect on the TEDPIX`s trend as a trigger or not from technical point of view.
Below is the logarithmic chart of TEDPIX on a daily basis. As it is apparent, bears have had overall technical advantage in last three months, as TEDPIX started to decline after hitting the high of 81,723 on April 2nd this year. But signs of better investor risk appetite in the marketplace has been observed recently, as an upward exit from the bearish channel has occurred.
Technically speaking, the exit shown above, could be an initial sign of a change in TEDPIX’s near-term trend, although, this zone must be observed very patiently as no sharp break-above has occurred. A strong penetration to previous major low at 76,000 area is needed to confirm a correction end.
This zone also overlaps the 38.2% ratio of Fibo retracement from the high of April 2nd to low of June 21st at 72,565. Solid resistance lies at 78,220 equivalent to 61.8% ratio of so-called Fibo retracement.
On the other hand, the probability of a correction end strengthens when the chart is analyzed from the timing point of view, as the bearish channel is broken from the exact period of its rally duration (shown on the chart below). Considering this, the chance of an end in correction rises as equal time cycles are significant factors to change trends.
In brief, Initial support lies at 73,650 a little above the main one at 72,560 (recent low). As long as the main support mentioned is held, bulls have more technical near-term advantage and the odds of a rise in overall prices in the marketplace strengthen.
As a conclusion, initial signs of a trend change have been observed recently due to both time and price factors mentioned above, although more clues are needed to confirm a consistent up-trend in action. In addition, from fundamental point of view it seems that companies now have steady conditions and this can be a support for upward trend.