Mohamed Khedr CFTe, MFTA
Senior Technical Analyst
T +202 3300 5721
Mkhedr@egy.primegroup.org
The year 2021 was extraordinary for traders in general, more specifically for speculative traders. While many traders made fortunes trading highly-speculative stocks in the first 8-9 months of the year, other traders suffered as stock prices began to pare their earlier gains in the latter part of the year. Such a performance was a manifestation of the “Castles in the Air” theory which became popular in 1936 by the famous economist John Maynard Keynes. The theory looks for stock bubbles that occur when the stock price achieves unprecedented heights in a short period of time. Such a rally continues until the stock finally collapses like a bubble which grows fast then explodes.
In this note, we present some examples of such castles, specifically those that have formed between 2020 and 2021, the most volatile period in terms of stock price gyrations on the EGX, be it violent rallies or sharp declines. We also showcase the track record of our technical calls which can be downloaded here. Last but not least, we present our top picks for the year 2022 along with other “high-risk” stock picks for speculative traders.