Stock market: why MASI is correcting — and how far it could go by end-2025

The MASI has gained 27% year‑to‑date, closing at 18,668 points on November 12. Yet the market remains volatile, marked by phases of growth followed by successive corrections. After rebounding in October, the trend once again turned downward in November.

Since the beginning of the month, the index has dropped nearly 5%, slipping back into correction territory. But what explains this renewed downturn, following the September adjustment that analysts had considered healthy—one that was supposed to set the market on a firmer footing?

Should we expect the correction to persist through year-end? For now, 2025 remains underpinned by a supportive newsflow: the organization of the CAN and the World Cup, rising investment, resilient market performance, favorable macroeconomic prospects, and contained inflation.

It is worth noting that the market had already gone through several turbulent phases earlier in the year. In the spring, global markets wavered after the increase in U.S. tariffs, temporarily undermining investor confidence. Then in June, mounting geopolitical risks in the Middle East, particularly the escalation between Iran and Israel, prompted a broad shift toward caution.

Reasons for the decline

"The stock market has clearly reached excessive valuation levels. While some are edging back toward more reasonable territory, overall P/E ratios remain elevated. In this context, it is preferable for the correction to take place now and extend throughout the remainder of 2025, so that 2026 can begin on a healthier footing," an analyst explains.

"Imagine beginning 2026 with the MASI at 20,000, or even 22,000 points. That would expose the market to a genuine risk of speculative bubble. Today, everyone seems eager to jump into equities and ride the momentum. But where is the real strategy? Where is the logic in portfolio construction?"

"And for those who believe the September correction was sufficient, it is worth recalling that even after a 5% decline, the MASI was still hovering around 19,000 points. Let's not forget that the year began at 14,700 points! The pace at which new records were set clearly underscores the necessity of the current consolidation."

"We are now entering the final two months of the year, a period typically marked by strategic adjustments. It is a time when investors step back, assess what worked and what has not, and reposition accordingly. This is precisely what we are witnessing in the market today."

"Institutional investors, for their part, appear to be pulling back. They are pausing, cooling off somewhat, and taking the time to reassess. In contrast, there has been a massive return of retail investors, and the numbers speak for themselves: they now account for nearly 28% of total trades".

"Retail investors often display more opportunistic behavior: they may buy a stock one today, sell it the next, sometimes even at a loss, before repurchasing it a few days later. Such movements generate volatility, and at times even mini-manipulations on certain securities. Unfortunately, these practices are being observed with increasing frequency."

In addition, another factor is that retail investors are currently selling to raise cash in anticipation of upcoming IPOs. Their arbitrage activity is mechanically amplifying the selling pressure on the market.

Technically speaking, "the Casablanca Stock Exchange stumbled upon a symbolic threshold around 20,000 points, which proved to be both a technical and psychological resistance. This zone coincided with a tense social backdrop and a gradual tightening of liquidity. Several institutional investors have, in fact, redirected part of their investments to other vehicles, most notably OPCs, whose assets rose by about 3% between August and September".

"From a microeconomic perspective, we are clearly in a seasonal transition phase. Investors are awaiting third-quarter results, which many are anticipating before repositioning their portfolios," our analyst explains.

"It is also worth noting that the semi-annual meetings of SICAVs take place in October, reinforcing this waiting posture. Everyone wants to see first how the market will approach the year's end before taking new positions."

"This wait, which might have simply resulted in stagnation, has instead led to a more pronounced decline, as trading volumes have fallen sharply. The reduction in liquidity inevitably amplifies corrective movements."

What BKGR says

"After reaching an intraday peak of 20,060 points at the beginning of November, the MASI entered a downward trend, with relatively modest volumes of around 210 MDH. By the close on November 10, the index stood at 19,064 points, below its 50-day EMA and near its 100-day EMA, which is expected to serve as a technical support in the upcoming sessions," BKGR notes in its latest technical snapshot.

"According to Elliott Wave Theory, the market is currently in the fourth wave of a larger third wave, typically a phase marked by stable volumes and mixed sentiment. Within this framework, two scenarios emerge."

"The first, and most likely, scenario is that of a triangle consolidation, with oscillating movements that remain above 17,765 points and below 20,060 points. In this configuration, the MASI could complete wave (C) of the triangle and rebound toward the 18,200–18,500 zone, corresponding to a Fibonacci retracement coupled with upward oblique support."

"The second, less likely, scenario is that of a more pronounced ABC correction, which could bring the index around 17,000 points to retest the base channel and the 50% retracement. However, in the absence of major negative factors, this scenario remains unlikely."

"In summary, the current consolidation/correction phase could extend until year-end, or even mid-January 2026, before the underlying bullish trend resumes. In the medium term, the outlook remains strongly positive as long as the MASI holds above 16,000 points, with potential to rise toward 21,500, or even 22,000 points. According to BKGR, this consolidation represents an opportunity “to buy the dip” ahead of the next bullish wave."

Source: medias24.com

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