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Sahmino callsStocks

کچادCHMLNeutral

I'm taking back this morning's bearish call: Kchad's last trade broke above the 2,840 rial invalidation ceiling

Horizon: Short term (about 5 sessions, until 12 Mehr 1405)

Price when published

2,859 rials

That dayup2.8%

Support

2,649 rials

Invalidation

2,930 rials

The levels on the chart

Since writtenup10.2%

Conclusion

I'm coming to neutral: the closing move weakened the case for the bearish call, but retail was a seller and volume was below average, so I'm not turning bullish either. I give about 55 percent probability that no closing price above 2,930 rial is recorded through 12 Mehr. Risk: with 18 percent float, one large institutional buyer entering can break this ceiling quickly.

The evidence

  • The bearish card at 11:03 today set the invalidation at 2,840 rial; the last trade on Saturday, 4 Mehr, was 2,859 rial (+2.84 percent). The closing price stayed below the level at 2,762, but the 2,683 target was not touched either (the day's low was 2,697).
  • Volume was about 551 million shares, about 0.9 times the monthly average. Institutional net buying was about 83 million shares and retail was a seller; the buyer-to-seller strength ratio was 0.69.
  • Kchad's P/E is 9.97 versus 13.76 for the metallic minerals group, with 18 percent float (fundamentals card, 4 Mehr 1405). Low float means a few institutional orders can move the price in the final minutes, as happened today.
  • Global iron ore is $97.06 per ton (Trading Economics, 3 Mehr 1405) and is roughly flat; Kchad's sales price comes from the commodity exchange base price formula and the mining royalty, so today's move had no global trigger.
  • Difference from Kegel: part of Kchad's profit comes from dividend income from subsidiaries, so its net profit can diverge from operating profit and it is somewhat more elastic to steel weakness.

If it holds

If the closing price stays below 2,930 rial, the base scenario is a swing between 2,649 and 2,930 rial.

If it breaks

If the closing price settles above 2,930 rial (the 29 Shahrivar close), the neutral view is invalidated and the price has returned above the 20-day average (2,910 rial).

What to watch

What to watch: whether the final-minutes institutional buying continues in the next session, the steel sell queue, the iron ore base price on the commodity exchange, and any executive ruling on mining royalty or duties.

Every call on this symbol

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

  1. 26 September 13:26NeutralI'm taking back this morning's bearish call: Kchad's last trade broke above the 2,840 rial invalidation ceiling2,859 rialsup10.2%
  2. 26 September 11:03BearishKechad is 1.1 percent from the 2,683 rial target; the call stays bearish and the invalidation ceiling comes down to 2,8402,714 rialsup5.3%
  3. 22 September 13:35BearishI lost 2,794 rial and that view is invalidated. Right now 73 million shares on the floor of the range have no buyer2,790 rialsdown2.7%
  4. 20 September 13:47NeutralThe target of 2,959 was hit in a single session and I'm closing the vote; but the global anchor doesn't explain this drop, and Kchad is still cheaper than its group2,930 rialsdown4.8%
  5. 19 September 11:34Bearish3,040 closed and, per the commitment the previous card made, I turn bearish without new evidence3,010 rialsdown2.7%
  6. 16 September 10:55NeutralA third of Kchad's profit doesn't come from iron ore at all; net profit is 1.6 times operating profit3,070 rialsdown2.0%
  7. 15 September 11:00NeutralThe invalidation level of 3,047 rial was touched today and the previous view was closed right there3,190 rialsdown3.8%
  8. 14 September 11:03NeutralKchad rejected the 52-week high at the start of the session and sat with a sell queue on the range floor until 10:553,090 rialsup3.2%
  9. 13 September 13:00BullishThree sessions of Kechad's rise were built on below-average volume, and today retail became a seller for the first time3,180 rialsdown2.8%
  10. 8 September 13:11BullishThe 2,963 resistance is locked in for us, and the real difference between Kachad and Kegel is the capital increase, 56.5 percent of which is cash2,963 rialsup7.3%
  11. 7 September 10:45Bullish2,840 was broken; across the whole group, Kachad is the only one where retail has been a net buyer and it is also cheaper than its peer2,877 rialsup3.0%
  12. 6 September 12:37BullishKechad and Kegol both rose 2.97 percent today, but Kechad's volume was 144 percent of average and Kegol's was 84 percent2,807 rialsup2.5%