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KASB Securities Limited and Economics Research- The Keystone – Equities

Karachi, April 09, 2014 (PPI-OT): KSE‐100: Overbought indicators call for swift correction

According to KASB Securities Limited,

The index remained positive during the entire trading day but slid in the second half to close near its session’s low.

The Stochastic in the daily chart is now turning down and RSI is overbought which is a bearish sign and the index could now target 27,700‐27,800 which is its 38.2% retracement of the rise from 26,400‐28,817.

The momentum of the correction usually becomes very strong when the index is making new all time highs in an overbought RSI situation.

The oil and gas sector (PSO and POL) and cement sector (LUCK and DGKC) look weak at current levels.

It is recommended to liquidate short term positions on strength and wait for the corrective move to accumulate positions.

First support 28,050 points, second support 27,800 points;
First resistance 28,800 points, second resistance 29,000 points

Stock Strategy Target Stop loss
BAFL Buy at 27.80 30 Day close below 26.30
LOTCHEM Buy at 7.80 8.50-9.00 6
DOL Buy at 7.30 8.50 6.50
NML Sell at 123 117 127
BOP Buy at 11.30 11.85 10.80
HUBC Buy at 53.50 56 Day close below 51.80
LPCL Buy at 12.10 14 Day close below 11.80
EFOODS Buy at 124 128 Day close below 119
PSO Sell at 421 410 426
Source: KASB Technical Research

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