Karachi, October 24, 2016 (PPI-OT): KSE100 – Correction Ahead
The benchmark Index is contained within the boundaries of rising wedge with gap contracting at the top now which makes advances shorter and shorter from the reaction lows (lower support line) and as a result unconvincing rallies. Similar activity was witnessed during the outgoing week where the KSE 100 Index rebounded sharply after stalling at the 50% Fibonacci retracement level (50% retracement of 39,866 and 41,631 remains at 40,750) which also lines up with the wedge support but soon diminished near the previous high of 41,600.
This indicates weakness of the underlying trend in short term. At this point, Elixir Securities Limited remains cautious as upside seems limited to 41,600/ 41,800 while on downside a break past wedge support at 40,900 would bring lengthier consolidations.