Daily Market Report

1. Executive Summary and Market Overview

The BIST 30 index continues to consolidate between the 16.182 level, which has been a significant resistance band in recent weeks. This range stands out as a critical test area for determining the market direction. The index breaking above this area is considered a potential trend reversal signal; if it fails to break, the likelihood of testing support at the 16.182 level increases. Market psychology is following a cautious path due to global central bank policies, geopolitical risks, and domestic inflationary pressures. In this environment, fund management prioritizes capital preservation and creating selective buying opportunities. While the performance in energy and retail stocks, which were prominent in previous periods, is subject to sustainability tests, the weakness in the banking and holding sectors necessitates careful selection in portfolio composition. Among the day's most critical developments are trade tensions between Germany and China, increased volatility in global bond markets, and US inflation data. These factors have the potential to instantly risk appetite and reinforce the necessity of maintaining a flexible cash position in portfolio management.

2. News and Macroeconomic Assessment

The macroeconomic ground presents both opportunities and serious risks for BIST 30 companies. The annual inflation rate rising to 31.5% continues to pressure consumer spending and companies' cost structures. This situation is eroding profit margins, especially in energy and input-sensitive industrial and construction sectors, while providing relative protection to retail and consumer staples sectors with inflation-resistant business models. Although the Energy Minister's messages on supply security contribute positively, natural gas prices remaining above the 71 €/MWh level pose a significant risk factor for energy-intensive industries. The global front, on the other hand, presents a complex picture. Germany's preparation of economic measures against China and the AI tension between the US and China are creating uncertainty in global trade flows. While Goldman Sachs' assessment that financial conditions have eased in Turkey indicates some increase in liquidity, this easing has limited impact on the real sector in a high inflation environment. Particularly developments such as cuts in social assistance and minimum wage increases are pressuring consumer confidence and negatively affecting domestic demand dynamics. In this environment, investor psychology has shifted to defense mode, and stocks with dividend potential and inflation protection are coming to the forefront. Investors need to act with a highly sensitive approach to changes in global interest rate policies and geopolitical developments.

3rd Technical Evaluation (Stock-based)

The BIST 30 index's ability to hold above the 16.182 resistance is the most critical issue from a technical analysis perspective. The index passing this level with high volume will serve as confirmation for the continuation of the uptrend. Otherwise, a pullback scenario toward the 16.182 support level could come to the agenda. When examined on a stock-by-stock basis, sectoral divergences have become quite pronounced.

TUPRS (Tüpraş) (company): As the leader of the energy and petrochemical sector, TUPRS is the most technically notable stock. Despite providing a massive 90.3% return in the last 60 days, it has risen to the 417.25 TL level with a 1.27% daily increase. The RSI indicator is at 66.42, remaining in a strong buy channel and not yet reaching the overbought zone. The MACD indicator has risen to +17.48, confirming the upward momentum. TradingView oscillators are also giving a "STRONG BUY" signal. TUPRS is at a 21% position within the channel and shows a strong positive correlation with a Pearson (r) correlation coefficient of 0.97. These data show that TUPRS is the most technically sound buying candidate.

BIMAS (BIM): The inflation-resistant retail sector representative BIMAS has shown a stable performance with a 31.5% return in the last 60 days. It is trading at 419.75 TL with a daily increase of 0.42%. RSI is at 54.95, at the lower limit of the neutral zone, maintaining its upward potential. MACD continues its positive trend at +5.96. While TradingView gives a "BUY" signal, our overall signal remains "WAIT". It is at 44% position within the channel and has a Pearson coefficient of 0.87. When combined with its fundamental strength, the stock's technical profile can be considered as a balancing element in the portfolio.

KCHOL — Koç Holding: KCHOL, one of the largest representatives in the holding sector, has technically weakened recently. It fell to 214.70 TL with a daily decline of 1.83%. RSI has decreased to 49.93, approaching the lower limit of the neutral zone. Although MACD is positive at +2.66, momentum is slowing down. While TradingView gives a "NEUTRAL" signal, our overall signal also remains "NEUTRAL". It is at 14% position within the channel and has a Pearson coefficient of 0.89. The stock's performance relative to the index has weakened and its weight in the portfolio needs to be reduced.

Banking Sector (AKBNK, GARAN, ISCTR, VAKBN, YKBNK): The majority of banking stocks are following a technically weak trend. The RSI indicators of AKBNK, GARAN, and ISCTR stocks have remained below the 50 level and are receiving "SELL" signals on TradingView. Especially in GARAN, MACD is negative and the overall signal has been determined as "STRONG SELL". Although YKBNK receives a "STRONG BUY" signal, its negative 60-day return and the "WAIT" long-term signal make this buy signal questionable. This weakness in the banking sector necessitates the exit of these stocks from the portfolio.

Other Weak Stocks: Many stocks such as ASELS, SAHOL, GUBRF, EREGL, THYAO are giving "STRONG SELL" signals. Particularly in GUBRF, weakness is evident with RSI at 43.91 and MACD at -1.84. These stocks should be completely removed from the portfolio or their weights should be reset to zero.

4. Company and Financial Assessment

When examining the financial soundness and profitability profiles of companies based on fundamental data, the sectoral differentiation is also clearly reflected in financial ratios. An evaluation based on current assets provides important clues about companies' operational efficiency and liquidity positions.

TUPRS (Tüpraş) (company): With current assets of 439.38 billion TL, it is one of the companies with the highest liquidity in BIST 30. This situation shows the company's operational flexibility and its ability to quickly adapt to market conditions. The company, which directly benefits from the increase in energy prices, forms a shield against margin pressures with its strong balance sheet structure.

KCHOL — Koç Holding: With its massive working capital of 3,615.15 billion TL, the holding is in a leading position in the sector. The diversity in its portfolio serves as a balancing factor against sectoral fluctuations. However, the recent weak performance indicates that some portfolio companies are experiencing slowdowns or cost pressures.

BIMAS (BIM): With working capital of 152.41 billion TL, it is one of the most efficient operators in the retail sector. Its low cyclical assets result in a low ratio of working capital to total assets, which in turn leads to high capital efficiency. Its ability to maintain pricing power in an inflationary environment confirms the strength of its financial structure.

Banking Sector: Banks' working capital consists of credit portfolios and liquid assets. While high inflation and interest rates positively affect banks' net interest margins, increasing credit risk premiums and concerns about a slowing economy cast a shadow over the sector. Particularly, the financial ratios of banks like GARAN and AKBNK may be a factor limiting their dividend payment capacity.

Energy-Intensive Sectors (EREGL, SASA, TOASO): The working capital of these companies is under pressure due to high-cost raw material inventories and foreign currency borrowing. Volatility in energy prices is the biggest risk factor for these companies' balance sheet health. Financial ratio analyses highlight high financial costs and shrinking profit margins.

In conclusion, fundamental data is moving in harmony with technical analysis. Financially the strongest companies are BİM (BIMAS) and Tüpraş (TUPRS). Companies in the holding and banking sectors, however, show weak performance both technically and fundamentally and should be removed from portfolios.

5. Risk Management and Strategy

Current market conditions are placing risk management at the center of portfolio management. Investors should adopt strict strategies to manage both potential downside losses and upside opportunities in a balanced manner.

Short-term Scenarios:

• Downside Scenario (Risky): The biggest risk is the possibility of the BIST 30 index breaking the 16.182 resistance and pulling back toward the 16.182 support level. In this scenario, a sharp sell-off could occur, especially in energy and holding stocks. In this case, risky stocks in the portfolio should be sold quickly and the cash position should be increased. Strictly applying stop-loss levels (such as 405-410 for TUPRS, 415 TL for BIMAS) is critically important for capital preservation in this scenario.

• Upside Scenario (Opportunity): The index breaking the 16.182 resistance with high volume and permanently will be a signal for the continuation of the uptrend. In this case, potential gains could emerge in fundamentally and technically strong stocks such as TUPRS and BIMAS. In this scenario, the portfolio's performance can be improved by gradually using the cash position in these stocks.

Portfolio Protection Shields:
1. High Cash Ratio: Keeping at least 35-40% of the portfolio in cash is the most basic protection shield against sudden market fluctuations. This cash provides flexibility to take advantage of a possible pullback or to meet unexpected cash needs.
2. Stop-Loss Discipline: Strict adherence to pre-determined stop-loss levels for each stock is required. Orders should be placed in advance and not adjusted according to market conditions. This discipline prevents small losses from turning into big ones.
3. Sectoral Diversification: Over-concentration in a single sector should be avoided. In our current portfolio recommendation, a distribution is expected with a focus on energy and retail sectors. This helps preserve the overall performance of the portfolio in the event of a sectoral shock.
4. Avoid Leverage Usage: In a high volatility and uncertain environment, using leverage can lead to rapid erosion of capital. The portfolio should be managed entirely with its own capital.

Strategic Approach: Our strategy is to adopt a cautious and selective stance. The "Up Step Rule" is not a standalone buy signal. Only controlled purchases should be made in stocks with strong technical and fundamental data. Regardless of market conditions, a portion of capital should always be kept liquid. This approach protects capital during possible pullbacks while allowing to benefit from opportunities at the start of an uptrend.

6. Recommended Model Portfolio

The model portfolio below has been created based on the technical and fundamental analyses, risk assessment, and strategic recommendations provided above. The portfolio consists of stocks selected considering technical criteria such as signal strength, Pearson correlation coefficient, and channel position. Weights are distributed according to each stock's potential performance and role in the portfolio. Entry zones, targets, and stop levels are derived from the provided current prices and technical analysis.