KSE100 - Week 08-2021: Blood on the Trade Floor!

KSE100 continued to bleed, losing -362 points or -0.8% on a weekly closing basis. The critical pivot level of 46100 +/- 100 has been breached. While a retracement was observed at the support of 45500 +/- 300, it proved to be a dead cat bounce and the leading rejection from pivotal resistance affirms bears in control. As a result, we reiterate our stance as mentioned in so many previous posts that KSE100 is expected to stay in the corrective phase for the first half of Mar-2021 and bear hunters will take the trophy home. 45500 - 44700 +/- 300 remain the two important support levels and in event of a meltdown, we may see a free fall towards 43800 +/- 300. But we assign little probability to a breakdown further below. Also, the strength of the market has been demonstrated by a slow regression and sector-wise exchange of hands rather than a swift meltdown as it used to occur in past. For a better understanding, please read previous updates from the last three weeks. 

Once again, weekly average capitalization dunked by -106.43 billion/PKR - significantly higher than the previous week but still a triple-digit figure on the lower side. This signifies investor confidence in buying the dip. Overall, the bourse is expected to stay in high liquidity owning to numerous reforms for attracting funds into the equity markets. 

Events that may impact the equity markets are PIB auction on 3-Mar & 31-Mar. MTB auction on 10-Mar & 24-Mar and Ijara Sukuk auction on 11-Mar of the CY2021. 

Happy trading and if you enjoyed reading this update, please let us know in the comments section below. 

[Edit 1-Mar: inaccurate capitalization data is corrected and the chart is updated to reflect the correction.]