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Sahmino callsStocks

RefiningPLSHNeutral

The refining fund hit a fresh record today (648,498 rial) but fell intraday below the 618,987 rial support; the market is still open

Horizon: Short term (1 to 2 weeks, until 18 Mehr 1405)

Price when published

616,979 rials

That daydown3.0%

Support

618,987 rials

Resistance

648,498 rials

Invalidation

610,077 rials

The levels on the chart

Since writtenunchanged0.0%

Conclusion

I am adjusting the view from cautiously bullish to neutral: today the price both set a fresh record and fell intraday below the 618,987 support, but since the market is still open and the closing price has not yet been recorded, this cannot be considered a definite breakdown. I give about a 40 percent chance that today's closing price settles above 618,987; a definite and sustained break below the redemption line of 610,077 would make this view fully bearish.

The evidence

  • Today, Saturday 11 Mehr at 11:01, the refining fund opened with an upward gap from 643,000 rial and hit a record of 648,498 rial (above the previous resistance of 640,746) but then fell to 616,979 rial, below the 618,987 support; the market is still open.
  • The intraday closing price (weighted average) is currently 628,062 rial, meaning -1.26 percent versus yesterday, while the last trade is down 3 percent; this gap shows that a large portion of today's trades were executed at higher prices.
  • The buyer-to-seller power is 0.30 today, and at the top of the order book the supply has reached 7 million 370 thousand shares at 616,979 rial, against demand of only 22 shares; trading volume so far is also roughly half the monthly average.
  • According to our overnight report, the fund's NAV is 892,873 rial, and the board price is now trading about 29.7 percent below it (versus 27.4 percent in the previous card); this fund has traded at a discount for years, and the discount alone is not a signal of value.
  • The Ministry of Petroleum's letter from 11 Shahrivar regarding the basis for feedstock and product pricing, which is the main risk for the four refining subsidiary stocks, remains unpublished without figures on Codal as of today (35 days later).

If it holds

If the closing price today or in future sessions settles above the 618,987 rial support, today's record (648,498 rial) will remain as a new resistance for the next attempt.

If it breaks

If the closing price settles below the 610,077 rial redemption line, the bullish/neutral view is invalidated, and a return to the 50-day average (550,402 rial) would not be unexpected.

What to watch

Today's official closing price (not the last trade), the fund's discount relative to daily NAV, and any fresh Council of Ministers resolution regarding feedstock pricing.

Every call on this symbol

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

  1. 3 October 11:08NeutralThe refining fund hit a fresh record today (648,498 rial) but fell intraday below the 618,987 rial support; the market is still open616,979 rialsunchanged0.0%
  2. 30 September 11:08BullishPalayesh this time broke the 621,524 rial resistance and reached 637,556 rial; outlook changed from neutral to cautiously bullish637,556 rialsdown3.2%
  3. 29 September 13:34NeutralRefining touched the 621,524 rial resistance again, still with volume below average and negative real flow621,010 rialsup2.7%
  4. 27 September 13:26NeutralPalayesh hit the ceiling of its band again, but on volume below the month's average; the redemption-price level raised to 571,860 rial600,567 rialsup3.4%
  5. 26 September 10:54NeutralOur bullish vote on the refining fund was invalidated; today's low of 582,583 rial is below the 586,058 line, and we move back to neutral582,583 rialsup3.1%
  6. 23 September 11:28Bullish204 units; this is all the supply left across the board's five price steps603,639 rialsdown3.5%
  7. 22 September 11:24NeutralThe market is not willing to buy 383 thousand billion rial of this fund's assets, but this same discount has stood for years583,473 rialsup3.5%
  8. 20 September 11:31BearishI'm recording the loss: the 611,953-rial invalidator is gone, and a 34 percent discount to NAV is smaller than it looks607,037 rialsdown3.9%
  9. 19 September 09:44NeutralThe upgrade to bullish was early: three sessions later our own support broke, and the same three caveats we had written were correct621,524 rialsdown2.3%
  10. 16 September 13:44BullishThe refiner touched the top of its range and closed 2.45 percent above its 52-week high; tonight's NAV re-read will reveal whether the 30 percent discount holds644,330 rialsdown3.5%
  11. 15 September 10:03NeutralThe discount opened wide for the first time, but not because the price fell behind: the 3 percent band kept the fund from reaching NAV630,311 rialsup2.2%
  12. 14 September 10:35BullishDiscount collapses for a third straight card: 31.1 to 29.1 and now 27.7 percent619,650 rialsup1.7%