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Sunday, October 25, 2020

KSE100: Week 43-2020 Closing Notes & Outlook for Week 44-2020

Despite volatile week KSE100 managed to gain +1102 point or 2.74% WoW closing basis. Rejection was observed at the lower boundary of 41900 +/- 200 which is proscribed critical resistance area and last day of the week traded much lower than this level. On the downside, 40700 +/- 200 is expected to play a strong support. A break down below this level shall be considered bearish sign. While a break above the critical resistance area of 41900 +/- 200 will trigger the second wave of bull run. 

As stated in the previous update, we expected week 43-2020 to be a critical decision maker and with that retro respect, index weekly capitalization average closed with a gain of +123.37 billion PKR. Which is a significant recovery over previous week and the weeks before that with heavy losses. Looking forward,we expect the optimism to uptick at the exchange while index behavior may remain volatile due to futures roll over. Week 44-2020 will be short by one day due to Eid-Milad un Nabi holiday on Friday, 30th Oct, 2020.

Sunday, October 18, 2020

KSE100 : Week 42-2020 Closing Notes

 KSE100 held on the upper boundary of its pivot zone as a support and shows a moderate bounce off from this level. Breaking down below the pivot may turn the tide bearish. However, index remains in see-saw state which points towards a corrective stance. Pivots are dodgy and difficult to analyze but sustaining a close above the pivot remains a positive sign. An uptrend will be higher probability if closing is sustain above the second resistance line of 40700 +/-200. 

KSE100 WoW average capitalization closed with a meager gain of +29.99 billion/PKR after several weeks of negative closing. The recovery is not significant enough to foment an  opinion yet. It could either be an early phase of bull returns or just a corrective bounce (divergence) caused by futures covering. Movement during the week 43-2020 shall be an important decision indicator. 

Events which may influence the equity markets are opening of new PIB auctions on 21-Oct, 30-Oct and MTB auction on 21-Oct. For full SBP auction calendar refer here.

Monday, October 12, 2020

KSE100 - Week 41-2020 Closing Notes

 First, a quick recap.

  1. 43000 +/- 300 was predicted as possible index high in a number of previous posts and looking at the chart above, index made a highest high of 42647 (rounded off) on closing basis - which is the lower boundary of our specified performance envelope. Its a bit disappointing that index took a harsh reversal right away from the lower boundary without making any significant effort to break through it. However, it is somewhat explainable due to threat factor caused by CKO enrollment deadline of 30/Sep/2020. The deadline has now been extended to 31/Dec/2020. 

  2. On the down side, 39500 was initial support failing which the bottom could reach 37500 - 38000. KSE100 made a lowly low of 39127 on closing basis.  Subsequent updates were missed on the blog due to health issues but short notes were sent on our Telegram group.
Looking forward, we see the repeat of history with 40700 +/- 200 posing as the first resistance and 41900 +/- 200 being the second. Closing above 40700 +/- 200 has been achieved so its a pat on the back already! However, if index dips again from a lower high then it will be a strong alarm of bear invasion once again. On the upside, it must sustain a close above its pivot with improving capitalization to support a bullish break. Index closed at 40,798 - gaining 727 points or 1.8% on WoW basis.

Market capitalization shows a dismal figure with average weekly capitalization in continuous down fall across the three week span. This is nothing short of panic selling - much of it instigated by the fear of CKO deadline.

I have not fully recovered from health issues, so blog updates will remain boring and minimal until then. I will just try to put the bare information necessary for the stay alive signal! 

KSE100: Week 39 & 40 - 2020 Missing Update Notice

This is simply a gap fill update for the time period missed. I was facing health issues and could not get online for making a timely update. As much as I am apologetic to avid fans of this blog, certain circumstances are beyond human control.