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Sahmino callsStocks

ZobZOBIBullish

ZOBI closed at 665 rials, above the 661 rial resistance; the view shifts from neutral to cautiously bullish

Horizon: Short term (1 to 2 weeks, about 5 to 8 trading sessions)

Price when published

662 rials

That dayup0.5%

Support

661 rials

Resistance

695 rials

Invalidation

640 rials

The levels on the chart

Since writtenunchanged0.0%

Conclusion

The view moves from neutral to bullish: today's close confirmed above the 661 rial resistance, exactly the rule set in the prior card. But with individuals net selling and buyer strength below one, I put the odds of this rally continuing to the next resistance at 695 rials at about 45%, and the odds of a slip back below the fresh support of 661 rials at about 30%. Full invalidation requires a close below 640 rials.

The evidence

  • ZOBI's close today, Wednesday 15 Mehr, reached 665 rials, above yesterday's close of 659 rials and above the prior card's 661 rial resistance; by that same card's own rule, this crossing turns the view bullish.
  • ZOBI runs a blast furnace, not direct reduction; its inputs are coking coal and iron ore, not pellet and electricity, and its product is beams and structural sections for domestic construction, not Foolad Mobarakeh's export sheet.
  • Iron ore pellet on the Iran Mercantile Exchange (4 Mehr) settled at 157,196 rials per kilogram, and global iron ore (6 Mehr) stood at 91.18 dollars; these anchor ZOBI's raw material cost, apart from coke prices, which we do not track directly.
  • Volume traded by the time this card was logged passed the monthly average of 4.37 billion shares, but individuals net sold 678,890,308 shares and buyer strength stood at 0.76; today's rally is not confirmed by retail buying.
  • ZOBI's trailing P/E has reached 55.4, against the basic metals sector average of 15.89; this wide gap suggests the recent rally has come more from tracking TEDPIX than from any improvement in margins.

If it holds

If the close holds above 661 rials and individuals turn net buyers, reaching the 695 rial resistance becomes more likely.

If it breaks

If the close falls back below 640 rials, the bullish view is invalidated and a return to the 622 to 640 rial range becomes likely.

What to watch

ZOBI's monthly activity filing on Codal, billet and beam prices on the Iran Mercantile Exchange, and whether individuals turn net buyers in the coming sessions.

Every call on this symbol

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

  1. 7 October 13:46BullishZOBI closed at 665 rials, above the 661 rial resistance; the view shifts from neutral to cautiously bullish662 rialsunchanged0.0%
  2. 6 October 13:42NeutralZOBI's 2.97% rally reclaimed the 640-rial support from yesterday's card; the 622 invalidation level is still untouched, but the bearish view is weakened659 rialsup0.5%
  3. 5 October 11:05BearishZob broke the 661-rial support with yesterday's close and today touched the neutral band's floor (640) intraday as well639 rialsup3.1%
  4. 3 October 11:05NeutralZob moved from the neutral band's ceiling to near its floor; today with a buyer-to-seller strength of 0.23 and heavy retail selling it reached 672 rial672 rialsdown4.9%
  5. 30 September 11:06NeutralZob reached the top of the neutral band (701 rial) for the second time, but with net retail selling; neutral view unchanged701 rialsdown4.1%
  6. 28 September 08:37NeutralThree rial short of the 640 target, buyers took Zob to the day's ceiling; closed down, view is neutral681 rialsup2.9%
  7. 26 September 10:53BearishZob's 669 rial target rejected today; 5 billion-share sell queue is larger than the monthly average volume, next target 640 rial661 rialsup3.0%
  8. 22 September 11:22BearishZob trades below book value and simultaneously at a 58x earnings multiple; here you're buying assets, not profitability695 rialsdown4.9%
  9. 21 September 11:27Bearish6.3 billion shares at the floor of the band with not a single buyer, after retail had been net buyers for 20 sessions716 rialsdown2.9%
  10. 20 September 11:29BearishZob's operating profit is negative, and that 12 rial of earnings per share, which makes a ratio of 61.5, did not come from steelmaking738 rialsdown3.0%
  11. 19 September 10:54BearishThe lock has opened and the other side of the quote is empty; I am keeping the 24 Shahrivar bearish call and lowering the invalidation level760 rialsdown2.9%
  12. 15 September 09:59BearishA ninth straight lock, and a ticker trading at 65 times earnings on a per-share profit of 12 rial783 rialsdown2.9%