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Monday, June 28, 2021

KSE100 Week 25-2021 Closing Notes

 Due to exams, will not be active for the current and next week 

A stance remains valid as per the previous week's update and the capitalization data is updated below. 

Events that may impact the equities market are MTB auction on 28 June. 

Sunday, June 20, 2021

KSE 100 Week 24-2021 : Post Budget Fizzle Out!

Not much enthusiastic reaction to post-budget fervor. A boundary rejection from 49000 +/ - 300 means that 48200 +/- 100 shall act as pivotal support to keep bulls in momentum (previous resistance now acting as support). The stance from last week is reiterated with a special focus on small to mid-caps. For important support and resistance levels, refer to the chart below.

On the fundamental front, induction of new DFC contracts with 60 and 90 days expiry will have an impact on volatility. Currently, we assess the situation as stabilization in the short term but increased volatility in the long term - a benefit to those who play their cards right. Refer to the official PSX document for detailed information. 

Market capitalization is sustaining above its critical resistance but the delta is shrinking razor thin. This may create a pattern of sharp upward breakout followed by a correction cycle. Taking its advantage to sell on strength and retire to cash. 

Sunday, June 13, 2021

KSE 100 Week 23-2021: Post Budget Expectations?

Bourse remained unstable throughout as per our expectations and weekly closing failed to break the pivotal resistance at 48200 +/ 100. Therefore, the index is actually sitting on the edge with no clear decision. This could signal a lazy start of the week ahead followed by recovery. The strategy is to take advantage of the dip and keep a special focus on mid to small-cap stocks for the trading session between mid-June to mid-July. Support and resistance are marked on the chart below. 

Weekly capitalization of KSE-100 hangs in balance with stubborn resistance at 8300+ Bn/PKR once again and this remains the fear spot. On the fundamental side, measures to boost capital markets with tax reduction in the budget FY 21-22 are a positive catalyst and we look forward to observing the impact. The budget appears positive for rolled steel, cement, small auto, EV, and power generation. 

Events that may influence the bourse during the week ahead is the MTB auction on 16-Jun. 

If you enjoyed reading this update, please let us know in the comment section below. 

Sunday, June 6, 2021

KSE100 Week 22-2021: Caution - Speed Breaker Ahead!

The bourse has rallied but is demonstrating stubborn pivotal resistance at 48200 +/- 100 - we do not see this as a good omen. It could be the need for bulls to take a resting spot. Looking forward, the strategy shall be to take advantage of the dips and protect your profits! The week ahead may be an interesting one. 

Market capitalization has once again crossed the benchmark and approaching its dangerous territory at 8300 Bn/PKR - an exhaustion point that has always been the death spot for bulls. Will there be a breakout this time? what are the bulls gonna do? how will the market react? Are the bulls cornered once again? Suspense?? - bring it on!