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!