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Saturday, August 22, 2020

KSE100 - Week 34-2020 Closing Notes: Downpour on the Index

Following up from our previous update, the index has tested lower band of it its pivot range as indicated and triggered a sharp intraday recovery. Heavy downpour is also to take the blame partially as the ensuing chaos causes brokers to quit their desk and run home. Causing loss of activity in the midst of a trading day, which is reflected in market movement. Just has heavy downpour began in the second half, panic selling caused a sharp dip, which recovered in the last hour. 

We reaffirm our view that bulls will stay in charge as long as the index remains afloat in its pivot range. Support, pivot, and resistance are reinstated as before. Looking forward we expect to see a turbulent mid-week ahead with the possibility of the pivot range being re-tested on a closing basis. 

Looking at the ten-year historical monthly performance relative to the current situation, It seems that the market is following the 2016 trajectory where August is poised to close between neutral and slightly positive followed by a bullish wave in September. The index is also undergoing exchange of hands between sectors with OEP, fertilizer and banks expected to take the lead.  Keeps fingers crossed and hope for the best!

Market capitalization remained strong for the first three days of the trading week but aggressive profit booking was observed in the last two trading sessions which pushed the weekly average to close -15.99 billion/PKR lower than the previous week. 

Happy trading!