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Saturday, August 28, 2021

KSE100 Week 34-2021 : Bears Dance In The Bourse!

Pivotal rejection at 48200 +/-100 shot the bourse down harder than expected but the bottom line at 47000 +/- 300 held on and this may prove to be the new floor.  All hints point towards a cycle reset which has kept the market range bound. Looking forward we maintain the stance of accumulation on the dip. Currently, the index stands at the edge of bearish territory but with significant exhaustion of deep downside. Patience and preservation will be a winner. All major support and resistance levels are marked below on the chart. 

An interesting development noticed is the increased volatility after the launch of 60 & 90 days futures. This has given rise to uncertainty in the market and the effect may take few months to level off. This is only a hypothesis as there is not enough data to back the theory so one may just proceed with keen observance before weighing in an opinion. Any further development will be notified in this blog. 

To better understand this post you may read the updates made in the last few weeks. 

An interesting metric to observe as the index hit a new high of capitalization on the first day of the week but failed to sustain later. However, the week still closed with positive capitalization gains which may be the catalyst for the performance in the weeks ahead. Overall the outlook is neutral with wait and watch approach. 

Happy trading and do let us know your feedback in the comments section below. Your input helps us improve. 

Sunday, August 22, 2021

KSE 100 Week 33-2021 : Are We Up Yet?

Turbulent days of the bourse come to an end with stability appearing on the horizon. During this time many traders had panicked and lost their cool along with their money. Because impatient trader and their money part ways very soon in the stock market. 47000 +/- 300 remained the absolute floor showing multiple bounces eventually signaling a return of bulls. Hurdle remains at pivotal resistance of 48200 +/- 100 while a double top around 49000 +/- 300 is expected. All major support and resistance levels are marked on the chart below. Looking forward the strategy remains taking advantage of the dip with a special focus on cyclicals such as cement, steel, auto and refineries. 

With two public holidays during the week, market capital does not represent an accurate picture with the weekly average still closing in the red but holding well to its benchmark. We expect to see better days ahead. 

Sunday, August 15, 2021

KSE100 Week 32-2021 : A Dull & Dead Bourse in Focus!

The index remained totally dull and dead throughout the week holding the 47000 +/- 300 as a support by the thread. Rumors blame the situation on developments in Afghanistan and a tussle between brokers and PSX management. To avoid any speculation, we have always traded by pure technical review only. Looking forward, the stance remains taking advantage of the dip but the situation overall isn't clear with a directionless market. We may expect better days ahead after passing the long weekend due to two days of Moharram Holidays. Wait and see approach may be the best remedy. 

Weekly average capitalization is moving in a narrow range and there is no clear momentum. But overall it has sustained itself above the 8000+ billion/PKR benchmark and that is a necessary support for making a higher breakout.. 

Happy trading and do let us know your feedback in the comments section below. 

Monday, August 9, 2021

Week 31-2021 : The Rat Race of Life?

 In a rather unorthodox update, today is not about stocks but market capitalization data is updated below.

 I have taken a break to emotionally redeem myself. I do feel happier and better connected to my inner self. I did get a second lease on life and it has shown me new realities and a different perspective on life for a better cause. Life is a lot more than wealth and material. It is also about connecting with our real inner self, cherishing great moments of passion, happiness, joy, and making great memories with dear ones. Time once passed will never return. Often tangled in a web of materialism and wealth building, are we trampling our most precious and invaluable life for paper? . One can never feel the true happiness of life without being humble and emphatically connecting with others. 

To give and receive unconditional love, acceptance, trust, honor, loyalty, and respect is truly the greatest joy of this mortal life. To understand that life is merely a phase that must come to an end for everyone, yet we struggle very hard to achieve materialistic possessions but do very little effort to connect with our true inner self and try to understand who are we? We take nothing to our graves and leave nothing behind except great memories. Even material possessions of the deceased left behind are valued for the memories and great moments they remind us of. Let us begin a new struggle in life where accomplishments are not measured in numbers but in emotions, empathy, and passion. A way of life where workaholism is not tolerated, emotions are respected and happiness is cherished over materialism. Where work-life is balanced with healthy personal time to connect with friends and family for creating great memories together. Where every photo, every possession, and every penny earned or spent tells a story of great joy, pleasure, emotions, and feeling alive. 

Let us not be mere mortals who exist to follow a robotic routine but a society where we live and behave more humanely with pure emotions. A pledge to not corrupt that baby-like innocence of our future generations with shadows of fear, greed, and a rat race to the top. Let us build a society that is not about valuing our existence by our wealth and jobs. Where relations are carved out of true passion and emotion. A place where children are raised to feel human first, have empathy as their core values, and be at peace with their true inner self. A culture that is free of pride, prejudice, racism, hate, bigotry, and stereotyping? Can we do that? A new day has come with new questions to think and ponder? As one of my nearest and dearest friends always says, "there is 5% hope even when 95% is gone". Do we all have that hope? 

Have a very nice and bright day and do let us know your views in the comments section below. 

Sunday, August 1, 2021

KSE 100 Week 30-2021: COVID Returns?

The week saw a range-bound performance in line with our expectation due to a multitude of factors but observed support at 47000 +/- 300 which was previously major resistance now acting as support. Honoring this level will keep the bourse in the accumulation phase followed by a recovery. All support and resistance levels are marked on the chart below. 

Looking forward, the bourse appears to be consolidating for the next upside on purely technical grounds but the uncertainty of COVID panic may very well push it to the other side. Observe with caution and avoid hasty trading is our word of advice. We expect the period between mid-Aug to mid-Sep as the prime point to sell-off. 

A major event that marked the outgoing month is the introduction of 60 & 90 days futures in accordance with international practices. This will help dampen the short-term volatility by a moderate margin and provide wider swings in the 90-120 days trading time frame. It's a win-win situation for those who understand investing with patience. Availability of a longer duration future will also take away the stress in taking a short position but at a cost of imposing higher margin requirements v.s 30 days future. Overall, we give a positive rating to this step initially but its long-term impact will only be visible in the next few months. 

Average weekly capitalization eroded all gains made during the earlier week to effectively close flat. It may be attributed to hasty profit-taking during the second half on Friday triggered by news of lockdown enforced in Karachi. 

Good luck with your trading and if you enjoyed reading this update, do let us know in the comments below.