KSE-100 triggers overbought signal: Bloomberg

November 07, 2023 (MLN): Pakistan’s world-beating stock market is approaching overheated levels as a widely tracked measure of momentum rises to the highest in 18 years, Bloomberg reported.

The KSE-100 Index 14-day relative strength index exceeded 90 for the first since March 2005.

In the previous 14 instances when the metric surpassed this reading, the gauge declined over the next 20 days on eight occasions by an average 4.2%, data compiled by Bloomberg show.

To note, the relative strength index (RSI) compares a security’s strength on days when prices go up to its strength on days when prices go down.

The Pakistan stock market has rallied to become the best performer globally since the $3 billion Stand-By Arrangement (SBA) was reached with the International Monetary Fund (IMF) towards the end of FY23, which saved the country from a sovereign debt default.

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