KSE100: Week 45 Closing Notes and Week 46 Outlook (2020)

KSE100 opened the week with rocket trajectory, gaining +843 points (2.1%) on weekly closing basis. The last trading day saw the bulls take rest at 40700 +/- 200 which was previous resistance now acting as support. Things going well in accordance with our predictions. Looking forward, the bulls still need to cross the hurdle of 41900 +/- 200 to confirm their further rally. On the downside, failing to hold 40700 +/- 200 as support level may see a short term dip towards the pivot. If index makes a continuously lower support then gradual shift of trend to bearish will be confirmed. To keep worst possible scenario in mind, the floor currently sits at 36800-37500.

Market capitalization demonstrated a remarkable recovery after a massive loss on first day of the trading week but weekly average remains net negative at a higher proportion than previous week. Much of it has been contributed by the impact of profit taking on last trading day. The proportionally higher loss of capitalization is a cause of concern and demonstrates potential weakness.  

Events which could influence the equity markets are PIB auction on 11-Nov, and Ijara Sukuk auction on 12-Nov. For full details of auction schedule, please check the auction calendar here. The multitude of auctions in a sequence could exert considerable pressure on the equity markets.