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Dhaka Stock Exchange Broad Index

Dhaka Stock Exchange Broad Index Analysis: Candlestick Chart of DSEX


Dhaka Stock Exchange is the larger stock exchange in Bangladesh. Bangladesh has two stock exchanges- Dhaka Stock Exchange and Chittagong Stock Exchange. Considering trade volume, Dhaka Stock Exchange (DSE) is the number one Stock Exchange in Bangladesh. Although DSE has four Indexes- DSEX, DS30, DSES and CDSET, DSEX is the ultimate representative of Bangladesh Share Market.

Moreover, this broad index actually represents the share market. If you want to invest in Dhaka Stock Exchange, you should learn the broad index movement for several years. In this article, you can study the previous Broad Index movement in candlestick chart. Basically, you need to know about how to read candlestick chart in order to understand the price movement.

However, keep in mind that stock market has equal pattern for years after years. If you can understand Dhaka Stock Exchange Broad Index, you can get complete idea about Bangladesh Share Market.

Let’s introduce top three Dhaka Stock Exchange Indexes.

Dhaka Stock Exchange’s DSEX Index

This index is the representative of whole market movement. Traders and investors follow this broad market index to take buy or sell decision.

Dhaka Stock Exchange’s DS30 Index

DS30 Index consists of top 30 listed companies. These companies are market draggers or market pullers. These companies have to fulfil certain criteria to hold top 30 status. If any company lags behind by any criterion, it will lose top 30 status. You can learn the movement of top 30 fundamental companies by following this index.

DSES Index

DSES index consists of shariah based companies. So, you can learn the performance of shariah based (listed by maintaining Islamic law) companies from this index.

DSEX Index Performance Evaluation

To learn about Dhaka Stock Exchange, you need to study the previous behavior of the market. Let’s go back to June, 2020.

See the DSE broad Index’s Screenshot

Dhaka Stock Exchange Broad Index
Dhaka Stock Exchange’s DSEX Index. Candlestick Chart by Trading View.

From the above picture, you can get the following information. A bear market indicator . On 31 May, 2020, Market closed with a big bull candle

Opening points- 4008.29; Closing Point- 4060.45. Highest Point- 4062.08. Lowest Point- 3998.43. Volume 43.957million. On 1 July,2020. A DSEX had a big bear candle that indicated 61 points decrease.

Moreover, from 31 May,2020 to 05 July, 2020, market was in neutral position. Points increased in one day and points decreased in another day. Traders and investors face difficult situation to earn profit from such type of market.

A bull market indicator

However, from 6 July, 2020 to 12 July, 2020 was an uptrend market. Points raised from 3980 to 4100 within 6 trading days. This uptrend is perfect for swing trading. Need to mention that, short sell and day trading are not allowed in Bangladesh Share Market. So, trade trend reversal strategy is perfect for swing trading. After that points started to fall. And stay neutral from 13 July to 23 July.

Why did market in neutral position?

First Covid-19 introduced in Bangladesh in march,2020. At the outset, this was not serious issue. So, market was neutral at that time. After that, market went uptrend. See the below picture.

Dhaka Stock Exchange Broad Index.
DSEX Index

From 26 July to 16 August, 2020 price constantly increased. Points increased from 4068 to 4860 within 14 trading days. Volume raised from 84.55m on 23 July to 514.50 on 16 August. This uptrend was continued even in Covid-19. Another picture.

Dhaka Stock Exchange Broad Index-at neutral
Dhaka Stock Exchange Broad Index-at neutral

16 and 17 August were bear candles. Again, price was uptrend from 19 August, 2020. Moreover, points raised from 19 August (4720 points on this date) to 16 September,2020 (5130 points on this date). Increased 450 points within 20 trading days. Volume raised 273m (on 19 August) to 396m (on 16 August)

Dhaka Stock Exchange at Downtrend

After that, Covid-19 spread widely. Market went downtrend. See the picture

Dhaka Stock Exchange Broad Index-DSEX
Dhaka Stock Exchange Broad Index-DSEX

On 17 september,2020 price again started to downtrend from 5115 points. This downtrend rally continued until points reached at 4840. 5115 points turned into 4840 points within 30 trading days. Time frame 17 September to 28 October. This was unpredictable market.

Want to see more about Dhaka Stock Exchange?

Look at the below picture. I say this was a neutral market. This behavior is unpredictable.

Dhaka Stock Exchange Broad Index-DSEX
Dhaka Stock Exchange Broad Index-DSEX

From 29 October (4848 points) to 23 November,2020 (4816 points). There were 18 trading days. Price Increased and decreased. But points went negative. This type of market is suitable to watch and wait. Your swing trading strategies may not work in neutral market.

Dhaka Stock Exchange hits an uptrend market

Watch the trend from the picture.

Broad Index at uptrend
Broad Index at uptrend

From 24 November,2020 (was 4821 points at that date) to 4 January,2021 (was 5651 points at that date) continued to uptrend market. Within 28 trading days, 830 points increased. Actually, this was the market for making profit.

Why that happened?

As Covid-19 Spread across the market, many people lost jobs. Businesses had to close as government enforced country wide strict lockdown. Hence, banks started to reduced interest rate. As a result, people begun to invest in share market. The aftermath was an uptrend market.

Another Neutral Market

Watch the picture

Dhaka Stock Exchange Broad Index-DSEX
Dhaka Stock Exchange Broad Index-DSEX

From January 5 (was 5615 points on this date) to 11 April,2021(was 5165 points on this date), one day points increased and another day points decreased. There was no specific uptrend or downtrend. Later, 450 points decreased in nearly 3 months.

Another Excellent Uptrend Market

DSEX at excellent Uptrend Market
DSEX at excellent Uptrend Market

From 12 April (5190 points and 128.66 m volume) to 21 June (6128 points and 635.5m volume) was an uptrend market. Points increased 938 in 3 less than months. This market is suitable for trade trend reversal. Many traders do not know how to trade in downtrend market.

Why Dhaka Stock Exchange faced this uptrend?

Covid-19 was under-controlled. So, businesses started to open as government left lockdown. Moreover, people started to invest in share market as share business is profitable. Thus, many investors and traders made up their previous loss. Some of them double their capital. More specifically, this market was suitable for all. This uptrend continued some more time. See the index’s screenshot.

DSEX at uptrend
DSEX at uptrend

From 28 June (6000 points and volume 417m) to 9 September,2021(7262 points and volume 625m) was another uptrend market. This trend was running another 2 months.

Dhaka Stock Exchange Faced a Danger

Watch the picture more carefully.

Dhaka Stock Exchange at danger
Dhaka Stock Exchange at danger

From 11 October,2021(7362 points and volume 404m on this date) to 8 November,2021 (6800 points and volume 247m on that date). DSEX has lost 562 points in less than 1 month.From above discussion, you have learnt the index movement for past 18 months. Even in Covid-19, Index didn’t behave like last one month.

What the reason for this downtrend market?

Many investors thought at the beginning that it was correction. Some guess it was dividend declaration and record date effect. But volume was also decreasing. One month back in September, volume was higher than November. Days are passing and points were falling on average 40 points in a trading day. Market faced excessive sell pressure. Before starting this downtrend, RSI indicator reached more than 80. Later, RSI reached below 30.

Does this continuous falling index indicate market crash?

Bangladesh Share Market crashed in 1996 and 2010. Many investors believed that share market crashed for institutional investors and conflict between Central Bank and Security Exchange Commission. On the other hand, overvalued stock was the main reason for these crash. But, the scenery was different at present. Stock prices were not overvalued.

As market was unable to handle excessive sale pressure, market was losing index and trade volume each day. Already, many investors had sold their holding and wait for buying in lower price. Moreover, market might continue this price falling. One month back, volume reached nearly 3000 crores. But, on 8 November, volume was nearly 1000 crores. Market had lost 2 times volume.

Bangladesh share market is not going to face another crash

After this continuous falling index, market stood in a good position. Another good reason- market is going to complete dividend declaration effect and record date effect.

Why all are hurry to sell

As traders were losing capital, they want to sell their holding. Moreover, big players were waiting to buy at lower price. So, all were busy to sell in order to buy at lower price.

See the picture. Market started to uptrend from 9 November.

DSE Broad Index: Uptrend Market
DSE Broad Index: Uptrend Market

Final Words

Like other stock market’s Index, Dhaka Stock Exchange’s DSEX has both uptrend and downtrend index movement. You need to understand the trend. If you make any trading mistakes, you should follow the golden rule of trading of stop loss. This above discussion helps you to understand the market behavior.

Founder of The Financial Ask


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