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Tuesday, December 31, 2019

Happy New Year - 2020

We wish all the stock traders, a very happy new year 2020. 
May it be full of bull runs and prosperity..!

Photo Credit: 

KSE 100 - Index Update 31 Dec

Last trading day of the year closed on negative note with 40900 +/- 100 taking the crown of unbeaten challenge. Index failed to sustain a close equal to or higher than its previous 52 weeks high of 41700 +/- 100 points. Looking forward, we expect the holiday period of western hemisphere to keep the index in negative territory. 

Market capitalization dropped by -24.26 billion PKR, which can be attributed to margin unavailability ahead of banking holiday on 1st of Jan 2020. Major event today was MTB auction ( link here ) which typically has a tendency to drain capital out of the market.

Monday, December 30, 2019

KSE 100 - Index Update 30 Dec

Index posted range bound trading session limited to intraday support and resistance range with encouraging volumes. DoD basis, market cap increased by +14.52 billion PKR which is an encouraging bullish sign shall the momentum prevail.

Friday, December 27, 2019

Week 52 - Closing Notes : 40900 Pain Lives On!

Last trading week of 2019 closed in the negative on the back of probable profit taking and margin calls by various brokers for annual closing procedures. 40900 +/- 100 once again came into spot light, as it was previous day resistance acting as today's support. 

Looking at the big picture, market has remained range bounce since week 50-2019 and 40900 +/- 100 has remained an unbeaten challenge needing a clean break. 

Market capitalization fell on DoD and WoW basis leaving much to be desired. Index capitalization lost -136.28 Billion PKR over the week making an average lower than week 50. 

This is serious bearish sign awaiting to be confirmed in next trading session. We expect index to remain under pressure during week 01-2020 with potential for improvement on the back of new year buying spree by investor.

Index support-pivot-resistance for Jan 2020 lies in sequence of 39500 - 40600 - 41800 +/- 100. 

Thursday, December 26, 2019

KSE 100 - Index Update 26 Dec

In our previous update, we have mentioned 40900  to remain a tough challenge. Index resisted once at 40900 during intraday and broke it at second attempt. Providing much needed clean break above 40900 to attract bulls attention. 

Looking forward, we expect index to post next intraday resistance at 41900 +/-100 and correction is expected here before opening way to weekly channel top of 42800 +/- 100 points. Fasten your seat belts for a rocky ride!

Market capitalization increased by +94.55 billion PKR on DoD basis which demonstrates fresh capital flow into the market and a breath of life for bulls. 

Wednesday, December 25, 2019

Happy Birthday to Father of the Nation - 25 Dec

Thanking the Father of the Nation - Muhammad Ali Jinnah, we present our rich tribute with this famous quote which is an appropriate lesson for stock traders too.

Tuesday, December 24, 2019

KSE 100 - Index Update 24 Dec

Monday 23, Dec - first day of the week continued to show selling  (short selling) pressure with market cap dropping once again below the last closing. On Tuesday 24, Dec - however, index posted strong retraction after breaking the lower band of our predicted weekly support at 40150 +/- 100.  

40600 +/- 100 will pose as next intraday resistance while 40900 +/-100 will continue to pose the hard challenge. The current uptrend may not be confirmed until rollover week ends on Friday, 27 Dec. Clean break above 40900 +/-100 is required otherwise index risk the chance of losing steam once again upon breaking 42000. 

Index seems to choke when capitalization rises above 8000 billion, this means cautious investor is quickly booking profits and short sellers are aggressive in their attacks with no fresh capital flowing into the market beyond this  points. Market is being perceived as over valued beyond this point and this can keep the index range bound for a while. 

We attribute this lack of investor confidence to various political issues and economic risk of Pakistan. 

Friday, December 20, 2019

Week 51 - Closing Notes

Week 51 turned out against our expectations. Technical rejection was faced at 42000 and index remained battered on the back drop of continued political noise. Short sellers made a comeback on continued index weakness, reminding the days of bearish rally. 

Looking forward to week 52 - the last trading week of 2019 - we can see index taking immediate support from 40600 - 40150 +/-100. In event of upside, resistance falls at 42500 +/- 100. Specific risk include possible selling pressure by foreign investor for holidays exit, political disturbance emerging once again and continued attack by short sellers in absence of volume.

Edit: 24 Dec 2019

Market cap continued to fall for entire week but posted a rise on Friday, signalling the return of buyers to the market. WoW basis, average market cap increased by 110.91 billion PKR which means market has remained healthy and any downtrend was just a correction wave. 

Wednesday, December 18, 2019

KSE 100 - Correction Shall Pass Too!

Index once again tested its weekly channel top at 41900 +/- 100 and dipped for see-saw correction. Change of hands between sectors was witnessed with OEP sector losing appeal on the back of oil saturating at its technical resistance. Its a correction phase once again, and it shall pass too. 

Market capitalization reduced by -92 Bn.PKR on DoD basis, which demonstrates investment outflow from the market. Risk of Bearish tendencies ahead if outflow continue to rise!

Tuesday, December 17, 2019

The Benefit of Dip - Index Update

Index briefly tested upper band of it's predicted resistance at 42000 and took a steep correction losing one thousand points and hitting 41000 which was previous resistance now acting as support. Index downfall was further accelerated by political noise. Initial rally to 42000 failed to make visible impact on prices of most stocks, which was a warning that correction is due now.

Buyers returned to take benefit of dip, pushing the index towards intraday recovery to close above 52 weeks psychological high of 41700 +/- 100 points. Breaking this physiological barrier before the year close will create further positive waves in investment circle. Looking forward, we expect upside to continue with next intraday resistance falling in the range of 42300 +/- 100. 

Market capitalization reduced by -13.86 billion PKR , demonstrating investment outflow from the market on DoD basis. 

Monday, December 16, 2019

KSE 100 - Index Update 16 Dec

Index posted slight correction at the predicted intraday resistance of 41300-41500 +/-100 range and resumed uptrend. We expect next major resistance to be 42000 +/- 100 where dip for correction is expected providing opportunity to patient investor for accumulation once again. Cement, Pharma, Auto, Technology, Food and Refineries will remain in focus. OEP can come under pressure due to resistance in oil rally.

We look forward to further profitable sessions at PSX.
Happy Trading! 

Sunday, December 15, 2019

Looking Forward - Week 51

We expect index to post intraday resistance in the range of 41300 - 41500 +/- 100 points and may come down to retest its support at 40900 +/- 100. This will be week 50 resistance now acting as Week 51 support. If the index survives its resistance then we may see 41900 +/- 100 as immediate market top. Taking a correction means target may be delayed. Increased foreigner selling may expose the index to winter slump which will  provide accumulation opportunity to patient investors. Overall, market looks good for Year 2020. 

Wish you happy and profitable trading. 

Friday, December 13, 2019

Week 50 Closing Notes

In week 50 opening notes ( link here ) we have mentioned that

Refineries will remain under pressure while OEP sector will perform on the back of rising crude. Cement, Steel & Pharma will remain in focus while 40900 +/- 100 will continue to pose tough resistance. 

For the first time today, Index managed to break free from its 40900 pivot and touched the upper band of resistance at 41000, briefly sustaining it. This is a positive sign for sessions coming ahead. Views on week 51 will be shared as a separate post on Sunday, 15 Dec.

DoD basis, market cap increased by 75.04 billion PKR which demonstrates increased investment inflows into the market. 

Week 50 average market cap was  7,823.45 billion PKR.

PSX Market Cap in PKR/Bn

(Source: JS Global Daily Market Wrap)

Thursday, December 12, 2019

KSE 100 - The 40900 Wall - Index Update 12 Dec

Index remained range bound through out the trading day, and honored its first support at 40100 +/-100 (EMA 9D).  Second support stands at 39800 +/- 100 points (EMA 13D) which must be honored to retain the uptrend otherwise index may remain exposed to the risk of down slide. On resistance side 40900 +/- 100 continues to pose as tough nut which must crack for further upside.

Market capitalization increased marginally over previous day showing renewed investor interest to accumulate on dip. However, closing remains indecisive and if index fails to post healthy recovery maximum by second half of Friday, 13 Dec then it may be exposed to long bearish spell. 

PSX Market Cap in PKR / Bn

Dec 12: 7,827.38
Dec 11: 7,799.27
Dec 10: 7,818.32
Dec 09: 7,769.86

(Source: JS Global Daily Market Wrap)

Wednesday, December 11, 2019

KSE 100 - Index Update 11 Dec

Trading remained a range bound session with index re-testing 40900 +/- 100 as its upper resistance and 40500 +/- 100 as its lower support once again. Major events today was PIB auction which always carries potential to dent the market ( link here ). This is usual behavior on the day of treasury or bonds auctions and market usually return to normal the next day. We look forward to next trading session before forming an opinion. 40900 +/- remains the tough nut which must crack to open further upside!

Tuesday, December 10, 2019

KSE 100 - Index Update 10 Dec

Market continued to post resistance at 40500 +/-100 during the first half, which was yesterday's support turned into resistance today. Until it dropped to our expected second support as 40300 +/- 100, testing this zone twice and showing healthy consolidation with renewed buying interests. From here onward, index gained strength and began its upward trajectory once again, breaking intraday resistance at 40500 +/-100 to make a healthy close. Looking forward, we expect to hit 52 weeks high as channel top. However, 40900 +/- 100 remains a strong multi-tested resistance where index has faced multiple rejection already. Failing at another attempt could unleash bad spell on the index and it may sink whole lot deeper in red.

Monday, December 9, 2019

KSE 100 - Index Update 9 Dec

Inline with our prediction 40900 +/-100 remained a tough resistance and market broke through it's first support at 40500 +/- 100 points to settle at its second support of 40300 +/- 100 points. Volumes found a boost as prices began to fall demonstrating continued investor interest at PSX. We expect the index to make a strong come back post consolidation.

Sunday, December 8, 2019

KSE 100 - Looking forward Week 50

40900 +/- 100 remains a major resistance which requires a clean break with next expected resistance at 41700 +/- 100. We expect major profit booking to trigger correction which will once again provide dips for buying. Cement, Steel, Food and Pharma is expected to post strength. OEP can see reinforcement on the back of oil rise due to OPEC cuts while refineries may stay under pressure.

Wish you a happy and profitable trading week ahead!

Friday, December 6, 2019

KSE 100 Index - Week 49 Closing

Index remained under pressure and range bound. Re-testing its support at 40500 +/- 100 and resistance at 40900 +/- 100, which remained a tough nut to crack as we predicted. Looking forward we expect see-saw behavior to continue until a clean break and close above 40900 +/- 100.

Views on week 50 will be presented in a separate post. 

Thursday, December 5, 2019

KSE 100 - Makes a New Support - Update 5 Dec

Correction exerted strong influence through out the trading day with wild see-saw swings but on positive side, index exhibited strong support at 40500 which was previously acting as weekly resistance according to our 1 Dec post ( link here ). Breaking a resistance and honoring it as a support level is good confirmation of bulls keeping upper hand. Looking forward to Friday, 6 Dec - we may see some correction phase to continue during first half and while second half is expected to be business as usual. We iterate our expectations to hit 52 weeks high at 41700 +/- 100 points if current trend keeps its momentum but 40900 +/- points remains a tough nut to crack. 

Due to high saturation of index, always keep trailing stops on long positions to book timely profit. 

Wednesday, December 4, 2019

KSE 100 Index - The Surge Back - Update 04 Dec

Index opened at dip but quickly began to move upwards before touching its expected support level, showing off a strong investor interest in buying the dips. 3 Dec, support of 40,000 acted as an intraday resistance broken by relative ease at second attempt giving the much needed closing above 40000 required to maintain bullish momentum. We maintain our highly saturated stance on the index and expect to hit its 52 weeks high of 41700 +/- 100 points by mid December 2019 which may set in another correction wave due to profit taking. 

Major event today was State Bank MTB auction ( link here ) but it failed to make any significant negative impact on PSX investor sentiments. 

Maintain trailing stops to protect your profits and buy the dips. New positions should be opened carefully and only in scrips which are not top saturated.

Tuesday, December 3, 2019

KSE 100 Index - Correction Sets In - Update 03 Dec

Index opened on a weak note and tested its weekly channel top of 40500 +/- 100 points as predicted (link here) at week's opening. 

Once rejected from weekly channel top, index maintained a see-saw momentum through out the day while continuing to slip downwards. This is a signature behavior of correction wave and nothing strange. Market eventually closed  at 39800 +/- 100 which was Week 48 critical resistance turned into support as per our previously published chart. Volumes remained strong which signals healthy accumulation behavior of investors and offsets fears of index going bearish once again. 

Looking forward, we expect the index to find support in the range of 39200-38600-38000 and open gateway to fresh value investing.

Wishing you a very happy and profitable trading ahead!

Monday, December 2, 2019

KSE 100 Index - 40,000 Benchmark Breaks! - Update 02 Dec

Inline with our prediction made on 1, Dec ( link here ) market honored its first resistance at 39800 +/- 100 points in a touch and go manner and breaking through it at second attempt to unleash an intraday bull run. Index sustained a strong closing above its first band of weekly channel top at 40000 points. Looking forward, we maintain bullish outlook on the market but also cautious of its highly saturated state. Correction is expected ahead and once again patient investor will be provided an opportunity to accumulate on dip. 

In event of sustaining a close above 40500 +/- 100 points, index may retest its 52 weeks high once again in the range of 41300 - 41700 +/- 100 points respectively. 

Expected support levels in event of dip are 39800 - 38000 +/- 100 points. We notice that support levels have dipped lower as compared to Week 48 closing, which is a signal for possible correction ahead.

We keep our expectation open on both side and watch the market with eagle eyes for investment opportunities. 

Maintain trailing stop on long position to book timely profits. 

We wish you a happy and profitable trading ahead! 

Sunday, December 1, 2019

KSE 100 - Looking Forward Week 49

In our last weekly update (link here) we predicted that market must break its weekly channel top of 38900 +/-100 Points to sustain another week of upward rally, and bulls have honored this prediction gracefully. Futures rollover week has passed with stronger than expected market performance with usual see-saw behavior.

Looking forward to week 49, we expect critical resistance to fall at 39600 - 39800 +/- 100 points while market has potential to make a weekly channel top in the territory of 40000 - 40500 +/- 100 points.  Market is once again showing overheated tendencies which require proactive stop-loss management. Failure to break critical resistance at first attempt can set a corrective dip. 

On futures front, November settlement will end by Tue, 03-Dec which can bring selling pressure to the market as surplus deliveries are dumped at discount.

Overall, we see market performance as strong until its weekly channel top is hit. Usual correction waves are expected for above mentioned reasons, presenting an opportunity to accumulate on dip for patient traders. Watching for rejection and reversal is essential exercise of week ahead. In event of downward slide, 39800 - 39300 +/- 100 points will be critical support levels.

Carrying forward our expectations from week 48 review, we may expect a dull market from mid of Dec'19 onward due to multitude of holidays in western hemisphere depressing trade activity of foreigners. This is not a significant risk as local investors are highly bullish on the market and local institutions may keep their bullish aggression active. 

Strategy ahead should be to maintain your profit taking stops at critical resistance and buy back in dips to maximize your profitability.

For illustration purpose only. 

Happy trading and wishing you a profitable week ahead!