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Thursday, April 30, 2020

Week 18-2020 : We Like to Hold Our Ground!

Note: There is no week 18-2020 mid update since the trading week was short by one day due to the labor day holiday on the 1st of May 2020. 

KSE100 made a spectacular breakout from its pivot zone, breaking the 33600 +/- 100 zones and sustaining a daily close above it. Throughout April 2020, our stance on the market has been consistent despite all the adverse news floating around. Since this is also a month closing update, we will make a recap of the previous commentary in the exact words it was posted. 

  • 3/Apr: Next resistance falls in the range of 32400-33600 +/- 100 which must break and close above this range to continue the bullish trend. 
  • 8/Apr: support and resistance falling in the range of 30500 - 30200 +/100 and 31800-32400 +/- 100 respectively. While upside channel top rest at 33600 +/- 100. 
  • 10/Apr:  sustaining a close above 31800 +/- 100. Now 32400-33600 +/- 100 remains the next hurdle.
  • 17/Apr: KSE100 has successfully breached its second benchmark resistance of 32400 +/- 100 and sustained a closed above it
  • 22/Apr: Any upside will face the next resistance in the range of 34800 +/- 100 whereas, support falls in the zone of 31800-32400 +/- 100. 
  • 24/Apr: However, neither of the condition has been fulfilled at week closing and therefore we carry forward our stance to next week. (market closed neutrally at pivot) 
Looking forward, we expect three possible outcomes based on technical analysis. Only the week opening may reveal the full picture. 
  1. KSE100 will continue its strong rally, break the 34800 +/- 100 barriers, and hit its channel top at 35500 +/- 100. Then drop for a trend reversal. 
  2. A weaker rally may be observed until the next resistance point of 34800 +/- 100, followed by a moderate drop for correction and then, another recovery up to the channel top of 35500 +/- 100. 
  3. A pre-mature reversal before hitting the next major resistance of 34800 +/-100; which would be a negative sign. 

Daily market capitalization went up by a significant +152.66 PKR/Billion but weekly average capitalization shows a dismal figure of only +39.96 PKR/Billion. This could be an expression of underlying market weakness which may only be confirmed at the opening of the next trading day.

Happy trading! 

1 comment:

  1. Splendid work as always too many information in too little words always help me in trading JazakalAllah khair keep it up great work