Strategy: Recommended course of action for the next quarter.
Quarterly Technical Outlook: Our quarterly view on the market based on technical indicators
Support: A price, or price zone, beneath the current market price, where buying power is sufficient to halt a price decline. A previous reaction low usually forms a support level.
Resistance: Resistance is marked by a previous price peak and provides enough of a barrier above the market to halt a price advance. It is the area over the market where selling pressure overcomes buying pressure and a price advance is turned back.
Chart: Linechart showing the movement in the KSE-100 index along with 20 day MA and 40 day MA.


Quarterly Technical Outlook

January-March 2001

Overall outlook mixed; focus on PSO and Hub Power
  • The market is evenly poised in a sideways channel bound by 1400 and 1520. A high impact break-out followed by base-building above 1560 will be needed to take the market towards the 1600 ceiling level and beyond. A weak penetration will result in a relapse followed by a retreat towards 1520.
  • We expect a mixed price behaviour from the pivotals. PSO is moving confidently towards the resistance level of 150.00. A convincing penetration will open the way for a rally towards 185.00. Hub Power has always struggled while approaching the resistance of 21.75. We hope that the current base-building pays off and Hub Power makes an upward break. Pak Telecom is in a defensive stance and should be accumulated near its support level of 18.85.
  • There are some good opportunities in second tier stocks nearing break outs. Fauji Fertilizers is expected to move towards 55.00 if it holds the support level of 47.00 for a while. Investors should wait for a mid-move consolidation in Engro Chemcials above 85.00, which can propel the scrip towards the 95.00 ceiling level. After shrugging off the strong resistance level of 19.70, Ibrahim Fibres can swiftly rise towards 21.75.
  • We advise our clients to exercise strict trading discipline. An ideal trading strategy involves a buy entry on reversals near support levels, with protective stops and profit taking near resistances.




Analysts:

Farhan Ansari
The above information and advice is given in good faith, without any legal responsibility. Taurus Securities Limited or individuals connected with it may have used research material before publication and may have positions in or may be materially interested in the securities mentioned herein.