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KASB Securities Limited and Economics Research – The Keystone – Equities

Karachi: KSE-100: Closing below trendline suggests further downside risk

According to KASB Securities Limited,

• The index registered a lower high and a lower low and has created an Engulfing Bearish Formation in the process. Moreover it closed below its channel support. This is bearish and suggests further downside risk.

• Additionally the MACD has edged down and has now generated a sell signal.

• KASB Securities Limited remains cautious on the market and suggest selling on strength.

Analysis and Overview:
The index opened positive and after touching its day’s high took to a downtrend to close in the red. Volumes witnessed a substantial increase of 76% and stood at 511mn. Moreover KSE30 index’s volume also witnessed a substantial increase of 45% and stood at 89mn. The index registered a lower high and a lower low and has created an Engulfing Bearish Formation in the process. Moreover it closed below its channel support trendline which is at 13,845 points (blue line) and is rising by 41 points on a daily basis. This is bearish and suggests further downside risk. The Stochastic Oscillator maintains its downtrend as well as sell signal while the RSI maintains its sell signal and has now edged down from the overbought region. Additionally the MACD has edged down and has now generated a sell signal as well. KASB Securities Limited remains cautious and maintain KASB Securities Limited’s sell stance on the market. Any buy recommendation is purely for short-term trading purposes only. The first support is at 13,732 points and the second support is at 13,628 points. The first resistance is at 13,898 points and the second resistance is at 13,984 points.

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