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Sahmino callsStocks

FarsPKLJNeutral

Fars's bearish target was achieved in a single session, and China methanol got 18.7 percent more expensive in a month

Horizon: Short-term (1 to 2 weeks, until around 15 Mehr 1405)

Price when published

11,790 rials

That daydown2.9%

Resistance

12,470 rials

Invalidation

11,414 rials

The levels on the chart

Since writtenup12.6%

Conclusion

The bearish target was reached and I'm moving to neutral: I give around 55 percent probability that the closing price stays between 11,414 and 12,470 rial until 15 Mehr, as more expensive methanol and a higher remittance dollar fill the floor from below and retail selling caps it from above. The risk is right here: the winter gas-restriction season is near and directly cuts methanol tonnage, and we have no up-to-date NAV for this holding's portfolio.

The evidence

  • The bearish setup on 1 Mehr (at 12,100 rial) called for a closing price below 11,862 rial: on 4 Mehr 1405 the closing price was recorded at 11,780 rial, at the floor of the range (negative 2.97 percent), below the 20-day average (11,919 rial).
  • 4 Mehr: volume of 446.8 million shares, about 1.4 times the monthly average. Retail sold 204.3 million and bought 36.4 million, institutional bought 410.5 million; buyer power was 0.87. Retail has been a net seller for 4 consecutive sessions.
  • China methanol was 3,513 yuan per ton on 2 Mehr, 18.7 percent higher than a month earlier (TradingEconomics). Fars's methanol segment gets its selling price from this same rate, while gas feedstock carries an administratively set rate; so the gap between the selling price and feedstock has widened.
  • Currency: the Exchange Center remittance dollar, the export revenue repatriation rate, rose from 1,584,801 rial (7 Shahrivar) to 1,706,268 rial (2 Mehr). TSE P/E is 7.86 versus 9.42 for the chemicals group (5 Mehr night reading).

If it holds

If 11,414 rial (the closing price on 15 Shahrivar) holds: the base scenario is fluctuation between 11,414 and 12,470 rial until the subsidiaries' monthly reports.

If it breaks

If the closing price is recorded below 11,414 rial: this neutral view is invalidated and retail selling pressure has outpaced the valuation.

What to watch

The subsidiaries' Shahrivar monthly activity report on Codal, methanol and urea, any ruling on the gas feedstock formula, and whether retail selling stops or continues.

Every call on this symbol

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

  1. 27 September 08:37NeutralFars's bearish target was achieved in a single session, and China methanol got 18.7 percent more expensive in a month11,790 rialsup12.6%
  2. 23 September 12:11BearishOur own invalidation level broke, and yesterday's view is void12,100 rialsdown2.6%
  3. 22 September 13:31NeutralA day after printing a 52-week high, Fars retreated to the floor of its trading range and the supply side turned heavy12,440 rialsdown2.7%
  4. 21 September 13:51BullishBrent fell 2.43 percent today and Fars rose 2.96 percent; this one sentence shows the driver of this holding isn't oil12,850 rialsdown3.2%
  5. 20 September 13:45BullishSupport at 12,750 did not break, only 600 rial of cash dividend came off the price; Fars was bought from the floor to the ceiling of the range after the general meeting12,510 rialsup2.7%
  6. 14 September 11:20Bullish$108 oil alone does not build Fars's profit; the 13,160-rial resistance was rejected, and the gap between feedstock and product is decisive13,240 rialsdown5.5%
  7. 13 September 12:57BullishFars Did Not Lock Today: Resistance Beaten With Real Supply, Three Days Before the General Meeting13,130 rialsup0.8%
  8. 12 September 11:32Neutral510 rial last year on capital 25 percent larger equals 408 rial; the reference for estimating the drop at the 25 Shahrivar general meeting is this same figure12,800 rialsup2.6%
  9. 9 September 11:08NeutralSecond-round general meeting got a date, 25 Shahrivar; our 12,310 support broke today and we move from bullish to neutral12,290 rialsup4.1%
  10. 8 September 13:08BullishThree consecutive lock sessions and 5.94 percent growth, but the second round of the general meeting still has no date and the discount to the group was cut in half12,670 rialsdown3.0%
  11. 6 September 12:34BullishFars general meeting failed to reach quorum, the ticker reopened and hit the ceiling with a 435 million-share buy queue11,960 rialsup5.9%
  12. 29 August 14:08BullishFars reached a 52-week high after breaking the 10,853-rial resistance, but today's volume was even below average11,060 rialsup8.1%