Zimbabwean stocks have paused for breath after soaring about 370% in 2021, a breakneck rally spurred by investors turning to the bourse as a haven against inflation.
Harare’s all share index posted a rare, four-day decline last week, with local market watchers saying the eye-watering gains have become overdone and a pullback was needed.
“The market does seem to be cooling off,” said Thedias Kasaira, MD of Imara Edwards Securities. The excessive increase in share prices was captured in at least one technical indicator: the 14-day relative strength index on the benchmark Harare stock gauge peaked at almost 99 on October 21, when stocks took their gains to 367% since the start of the year.
That is well above the level of 70 that some technical analysts see as suggesting a market has risen too far and may be about to swing lower.