Industry or bank stock?

Ufuk KORCAN / THE ROUTE OF MONEY

If you looked at the headline and started reading this article, then you are interested in stocks. Maybe you have never bought shares before, you are thinking of buying, maybe you have bought different shares many times in the past. The situation in Turkey, especially after the steps taken in the last period, increased the interest in stocks ‘forced’. According to Central Registry Agency (MKK) data, 130 thousand people in the last 1 year and 1.3 million people in the last 3 years have been added to those who have invested in stocks. The increase in working from home during the pandemic process and the tendency to protect savings in the face of rapidly rising inflation were effective in these increases.

Good company earns

The ‘Currency Protected Deposit’ step, which was taken to prevent the transition from Turkish Lira to foreign currency, was a good alternative for foreign currency investors. However, since this product did not fully respond to the demand of those who wanted to protect their savings against the inflation rate, domestic investor interest in the stock increased. For those who are new to the stock market, it is useful to remind this. Think of your investments in the stock market as long-term. So historical data; reveals that the stocks of companies that have a growth story in the stock market, are well managed and pay regular dividends do not upset their investors.

Bank stocks hit the gas

Let’s come to the answer to the question in the titleā€¦ Banking stocks attracted attention with the sharp upward price movements in the last weeks. While the BIST 100 Index has risen by nearly 55 percent since the beginning of the year, the Banking Index achieved a return above the index with 60 percent. The Industrial Index, on the other hand, lagged behind the index with 40 percent. However, when we look at the last 3 years, it is seen that the industrial sector shares have made a big difference to the banks in terms of performance. In this process, the remaining banking stocks tried to close the gap to some extent with the effect of their good balance sheets.

The importance of making a portfolio

What will happen next? If you want to make money in the stock market, analyzing which sectors are highlighted by the general trends can put you in an advantageous position. However, it is not sufficient by itself. Rather than investing in only one sector stock, a portfolio consisting of promising company stocks that continue to grow in different sectors (adhering to trends) will be more helpful in carrying you to your goals. It seems unlikely that an investor who thinks long-term without expecting high profits in the short-term will make a loss in the stock market. For this, you need to master a nervous system like steel that will not panic in every price movement.

Foreigners may come before the election

In the short term, inflation at home and the decisions of the US Federal Reserve (Fed) continue to be followed abroad. However, the elections to be held in 2023 may create another story. Some of the foreign investors who have left the markets in recent years may want to buy the expectation that there may be a change in economic policies after the elections. Therefore, even if it is not as large as in previous years, foreign investors who can come to Turkey will first prefer stocks that have lagged behind in terms of performance in recent years and have the depth to trade. At this point, big banking stocks can come to the fore.

It may be of interest to those who have a currency

Again, there is a general expectation that the inflationary environment will continue for a while. In this process, there may be interest especially in food retailing stocks. Again, in an environment of global recession discussions, it is suggested that even though there is a risk of a decrease in revenues, stocks of companies that export and have foreign currency surplus should be kept in portfolios due to possible upward movements in exchange rates.

Where are the critical levels in the BIST 100 Index?

On the weekly chart of the BIST 100 Index, the sharp upward trend that started in the week of July 18, 2022 continues. In addition, the weekly close above the 2 thousand 797 points level, which was the most important resistance point of the past week, is quite positive. The index will now try to turn this trendline, which previously worked as a resistance, to a support level. If it is successful in this, it can be expected that the upward movements will continue, albeit with a fluctuating price course. The support point of the aggressive uptrend, on which the index is located, corresponds to the level of 2 thousand 784 points for this week. In other words, unless the index falls below this support point this week, it can be said that the short-term main trend is up. In the negative scenario, if this support point is entered, there may be a risk of retracement to the levels of 2 thousand 350-2 thousand 400 points.

Below 17.07 conditions for dollar decline

The fact that the parity is above 17.07 TL on the weekly chart is the biggest factor explaining the rise in technical terms. For this reason, for a possible reversal signal in the parity, it is necessary to go below TL 17.07 first. In such a scenario, a pullback movement can be expected up to the support point of the uptrend, which corresponds to the 16.25 TL level at the first stage. Reaching below this point has the importance to trigger a pullback in the parity up to the 14.47-14.85 TL band. For this reason, the most critical point in possible downward movements is currently 17.07 TL. If you stay above this point, the upside risks will increase, and the risk of testing the 18.25 TL level will increase in the first stage.

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