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.
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