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Sahmino callsStocks

Dara YekomDARABearish

Dara Yekom reached and passed the 535,306 rial target; we're lowering the invalidation level, and the next target is 521,371 rial

Horizon: Short term (6 to 10 trading sessions, until around 19 Mehr 1405)

Price when published

530,112 rials

That daydown3.0%

Support

521,371 rials

Resistance

546,507 rials

Invalidation

554,727 rials

The levels on the chart

Since writtenup3.8%

Conclusion

I remain bearish and I'm lowering the invalidation level from 567,843 to 554,727 rial: I put roughly 60 percent probability on a closing price at or below 521,371 rial by 19 Mehr. The risk is right here: a Money and Credit Council resolution or market-making news could close the 36 percent discount in two sessions and render this call meaningless.

The evidence

  • Today, 4 Mehr, through 10:50, the last trade was 530,112 rial (down 3 percent, at the floor of the band, intraday); the target from the 30 Shahrivar note, which turned bearish at 550,819 rial, has been breached intraday.
  • The sell queue is about 1.54 million units from 177 sellers, and the buyer-to-seller power ratio is 0.38; the price is about 7 percent below the 20-day average (568,497 rial) and 11 percent below the 52-week high (595,991 rial, 25 Shahrivar).
  • NAV is 827,085 rial with a discount of 35.82 percent (2 Mehr); this fund is distributed among millions of retail shareholders, and that alone creates structural supply, so the discount by itself is not an opportunity.
  • Our desk's risk-free rate rose from 41.3 percent (21 Shahrivar) to 42.4 percent (3 Mehr); for a bank-heavy portfolio this means a higher cost of money and a stronger competitor to equities, and the Tehran Stock Exchange's overall index was also down about 118,000 units today through 10:49.

If it holds

If the price stays below 546,507 rial, reaching 521,371 rial (the 2 Shahrivar close) is the base scenario.

If it breaks

If a closing price is recorded above 554,727 rial, this bearish view is invalidated and a return to the 20-day average becomes likely.

What to watch

What to watch: the daily NAV and the discount to it, Money and Credit Council resolutions, and the direction of the banking group on the Tehran Stock Exchange.

Every call on this symbol

20 calls; the move to the next call from the prices when written

  1. 26 September 10:55BearishDara Yekom reached and passed the 535,306 rial target; we're lowering the invalidation level, and the next target is 521,371 rial530,112 rialsup3.8%
  2. 21 September 11:29BearishMy invalidation level was breached today but the closing price hasn't confirmed it yet; I'm saying the same thing and not waiting for it to get more comfortable550,819 rialsdown3.8%
  3. 20 September 11:33NeutralDara Yekom's discount reached 35.5 percent, and the reason isn't that it's cheap but that its shareholders number in the millions567,838 rialsdown3.0%
  4. 19 September 10:57BearishIn the morning it saw 608,000 rial, now it has no buyer at the bottom of the band, and the redemption discount reopened to 34 percent578,112 rialsdown1.8%
  5. 16 September 10:32NeutralDara Yekom 29 percent below redemption value: this discount is not an opportunity, it is the price of structural supply pressure587,989 rialsdown1.7%
  6. 15 September 10:07NeutralThe 587,167 invalidation level was rejected and our bearish call is void: yesterday's card itself had written that it was built on a single session591,617 rialsdown0.6%
  7. 14 September 10:22NeutralOur condition was met by 478 rial and given back the next morning; this does not bring an upgrade576,204 rialsup2.7%
  8. 13 September 11:59NeutralThe ceiling of 586,689 rial was broken, but by only 0.03 percent and with accumulated supply overhead588,450 rialsdown2.1%
  9. 12 September 10:46NeutralThe 575,131 rial invalidation level broke in the last trade, so we close the bearish view; the close is still below it578,942 rialsup1.6%
  10. 9 September 10:03NeutralDara Yekom trades 34.85 percent below NAV, but this discount is structural with millions of retail shareholders, not an opportunity568,989 rialsup1.7%
  11. 7 September 10:07BullishOur bearish reading was invalidated and did not reach its target either, but this time volume is behind the move569,510 rialsdown0.1%
  12. 5 September 11:19BearishDara Yekom today fell 3 percent to 552,017 rial, breaking the 563,969 rial support552,017 rialsup3.2%