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Friday, January 29, 2021
KSE100 Week 04-2021: Bulls Charge Back!
The index observed a volatile week where bears tried to invade at first but the bulls fought back successfully and held their ground. 46100 +/- 100 pivotal resistance finally turned into pivotal support which demonstrates the ball now moving in the court of the green team! But overall index failed to touch its critical resistance of 46800 +/- 300. Rather it struggled all week in a narrow range giving an impression of the exhausted bull in the fighting ring pulling back and charging forward a limited distance but too fearful to take on! Divergence signals triggered last week remains active - requiring a cautious stance ahead. However, the index will turn bullish once again if a break above 46800 +/- 300 is observed with strong momentum. On the downside, the pivot is at 46100 +/- 100 and support levels are 45500 - 44700 +/- 300. The index closed with a net weekly gain of +517.5 points or +1.13%. Once again, we reiterate our stance on late Feb to mid-March being a high probability period for bear hunters to pick their trophies!
It's more than a hat trick when it comes to market capitalization as it demonstrated a four-week winning streak of sustenance above the 8000+ billion/PKR benchmark. Strong cash flow shows investors remained confident across the week and dips were absorbed as buying opportunities. A granular look of the last trading weeks tells us a range-bound picture with intraday capitalization fluctuating in a narrow range. This may be interpreted as either start of the distribution cycle or the exchange of hands within the sector. Close guard ahead may tell a better picture. Overall the rise of the index value is supported by the cash behind it so just follow the money. The outgoing week closed with a net gain of +71.84 billion/PKR.
Events that may influence the equities markets are PIB auctions on 3-Feb, 2021.
Happy trading and if you enjoyed reading this update please leave a comment below!
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