Technicals, Sentiment, Fundamentals: Assessing The TUNINDEX

We maintain our belief that the largely uninterrupted rally in Tunisian stocks cannot continue indefinitely. We pointed out a few weeks back that the technical picture might be suggesting a change in direction (or at least a loss of momentum), and sure enough, the downside has continued. Some of the banks in particular look weak: UIB and L'Arab Tunisian Bank are both down 10% on their peaks (outpacing the overall TUNINDEX decline of 1.2%), which is a warning sign for the index and potentially also for the economy at large. Here we examine our cautious stance from three angles -

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