KSE100 made its weekly closing in with a gain of +520 points or +1.12%. The last trading day of the week saw the index made an intraday breach 46800 +/- 300 critical resistance area and saw a quick dive downwards. The overall intraday closing was down by -27.84 (-0.06%). Momentum has started to show weakness which affirms our stance of profit-taking. Not a firm believer of candlestick patterns but the last trading day did close with the gravestone Doji candle pattern. which suggests that an initial spike may be observed before dipping down for a lower-low once again. The week ahead will be the decision-maker! The current expectation is sideways.
On the downside, we carry forward the stance from the previous week indicating 46100 +/- 100 as pivotal support and 44500 - 44700 +/- 300 is a strong support level(s). Momentum has started to weaken and looking forward, it's time to change hands with profit booking in the saturated stocks and fresh entries advised in those available at attractive valuations. Some short-term potential remains in the market - like squeezing the last drop from a lemon while investors will be happier to hunt bears during the major correction cycle. We have predicted late-Feb to mid-March for this frenzy!
On the commodities front, oil has made a historical rally with Brent crude hitting $60 briefly for the first time since the COVID19 depression. This could potentially act as a positive trigger for the OEP sector.
Average weekly market capitalization gained another +70.77 billion/PKR over the previous week but the average has been in the double-digit limit for two consecutive weeks. The shrinking gains may be the signal of exhaustion. Overall, our outlook is to stay cautious and preserve your profits.
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