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Sunday, April 25, 2021

KSE100 Week 16-2021: Too Busy to Write a Blog!

 A lot has been up lately and caught in a lot of new development. So a delayed update with not much to say once again. New strategies driven by data and faster signaling are expected to be out soon! During the week, the index went up by +976 points or +2.18%. Views from the last update are reiterated with a sell-on-strength stance. To better understand this post, refer to last week's update. 

The average market cap fell by -34.84 billion PKR and remains below the benchmark. Overall, the capitalization trend appears to remain under pressure for a while. 

Events that may impact the equities market is OMO maturity on 30-Apr.
[EDIT: there is no auction on 29-Apr]

Sunday, April 18, 2021

KSE100 - Week 15-2021: Another Lazy Week and Happy Ramadan 1442A.H

 A lackluster week closed with a gain of +119.15 points or just +0.3% but a signal is starting to resonate for a weak bullish comeback. Support and resistance remain valid as marked on the chart below. We look forward to selling on strength stance for the week ahead and will refrain from fresh buying until the dust settles. 

After heavy negative spells, the week emerged with an average gain of +89.04 Bn/PKR growth in the market but still remains below the 8000+ Bn/PKR critical benchmark. This is more or less a hard resistance to market capitalization for foreseeable future. Although the linear trendline is now showing a strong cross over its long-term horizontal resistance, we all understand that markets do not have a linear relationship. Therefore, what the trendline may show is a matter of observation over time.  During the week SBP injected 166.65 Bn/PKR for one day and 1975.05 Bn/PKR for seven days via OMO injections. Whereas a critical event ahead is the MTB auction on 21-Apr. Fingers crossed and hoping for the best! 

We wish our followers a very happy Ramadan 1442 and if you enjoyed reading this update, let us know in the comments sections below. 

Sunday, April 11, 2021

KSE100 Week 14-2021 : More Auctions Pain!

Not much to say in this delayed update other than reiterating views from last week's post. I had been extremely busy with new innovations in stock analysis. Trying to ditch charts for some time and develop better scientific methods to analyze stocks. Other than that, I have hurt my fingers in a small domestic mishap and knocked out of typing for few days. It is really an inconvenience when your right-hand goes out of service! 

The market is expected to remain unstable and the major levels are already marked on the chart we share every week. Its gets boring, having to repeat the same mantra during these correction cycles. Weekly closing observed a net loss of -208.43 points or -0.46%

Average weekly capitalization fell by -21.81 Bn/PKR as govt auctions continue to eat liquidity away from the equities market and the monster is not likely to stop until it has done its quota of four trillion/PKR. Dates of further pain ahead are PIB auction on 13-Apr, 21-Apr, and MTB auction on 22-Apr. Brace for impact and prepare for more pain as the debt monster just got bigger, better, and stronger! ( SBP sets auction target of Rs.5.525 trillion for next three months )

We are attempting to build a data model of SBP operations to gauge their impact on the equities market. The job is complex and needs lots of data accumulation manually. But when there is a will there is a way! If you enjoyed reading this update, do let us know in the comments below and watch our next update for something new and revealing.

Sunday, April 4, 2021

KSE-100 Week 13-2021 : Bears Returns!

 [Due to health issues, the update is being released late. Further, the blog will now update every Sunday as the required closing data is released on Sunday's]

KSE100 lost another -752.74 points or -1.70% on a weekly closing basis. Although last week's closing had been hopeful, honoring an important benchmark of 45500 +/- as support, the bears gained strength on prospects of another COVID wave and lockdown fears. The market seems to be resetting its cycle and our benchmark index chart has been updated to reflect new support and resistance zones.

The first major support is at 43800 +/- 300 and the second major support is at 42800 +/- 300 with bearish momentum still prevailing. The expectations are to make a double top at its previous high of 47000 +/-300 and then observe the potential for a further breakout. 

Average weekly market capitalization fell by -215.71 billion/PKR. A steep fall indeed and once again establishes the 8000+ billion/PKR benchmark as a hardline resistance. This stubborn curse simply refuses to go away. Although the major momentum is gradually building, we do not foresee a significant breakout above this level in near future. 

Events that may impact the equities markets are PIB auction on 13-Apr. MTB auctions on 7-Apr and 21-Apr. On the money market front, SBP made a fresh injection of significant amounts on the 1st and 2nd of  April. The impact is yet to be observed. There are no reliable means to know the flow of these short-term injections, but it is speculated that much of these funds do find their way into the equities market. We shall observe the trend over a long period before deducing an opinion. 

If you enjoyed reading this update, do let us know in the comments sections below.