Tehran Stock Exchange Dividend & Price Index(TEDPIX) soared 170 points, to high of 91,106 x on Tuesday, December 5, 2017 closing the day pretty close to all time high of 91,358 x hit on last week. As TEDPIX is composed mostly of commodity-based companies in Iran, having influential weight on its measurement, the recent rise in commodity prices, specifically oil and base metals worldwide, has been the main driving engine for TEDPIX to skyrocket to levels never seen before.
As it was mentioned in our previous post “TEDPIX’s bullish triangle has been broken”, the signs of a rise up to major high of 90K x, hit on early 2014, was increasing after breaking above the bullish triangle, demonstrated on the chart.
In coming lines, we are going to find the major targets of the so-called rally through TEDPIX’s daily chart on logarithmic scale.
As can be seen, the gauge has been fluctuating in a long time bullish channel since 2009, showing a significant bounce each time touching it from either sides. The recent bounce back was no exception so far and has caused the index to break the all-time high, changing its role to the primary supportive zone.
More technically speaking, the major targeting zones are located at 98K x and 108K x, respectively the 127.2% and 161.8% Expansion Fibonacci levels of the super cycle corrective wave from 2014-2015 high to low. It is worth noting that the stability above 90K x is the initial condition of hitting so-called targets. In other words, any failure to hold this level and breaching below 90K x can exceed losses to 88K zone before any attempt to rise.
Interestingly, from the timing perspective, a period of approximately 820-30 trading days has formed a cycle composed of a rally and its following corrective wave, shown on the chart below. It is noteworthy that the ratios inside this period seem to form major highs and lows. Accordingly, we expect this time cycle to repeat once more, so we might have a major high on the way at around 45 trading days from now, equivalent to 61.8% of the hypothetical time cycle discussed earlier. (Second graph)
This time horizon from one hand, and its overlap to resistive zone of 161.8% Expansion Fibonacci level (108K x) from the other hand, makes it an important level to watch.
To conclude from previously mentioned factors, we believe that the odds of a further rise in near term is much more than a decline and there is still more space for higher prices.
It should be taken into account that the analysis is considered valid as long as the primary supportive zones mentioned in above are held.