January 16, 2024 (MLN): The main gauge for Pakistan stock market formed a doji candle last week, signaling uncertainty in the market.
KSE-100 index has traded sideways for the past 10 sessions, within a tight range of 2.5%.
This indecision/lack of conviction from both buyers and sellers has also been visible from declining volumes.
KSE-100 has formed a new range, with a support at 63,758 and a resistance at 65,357.
Support Levels
63,758
61,800
60,200
S1
S2
S3
Resistance Levels
65,357
66,600
67,094
R1
R2
R3
The next direction will be determined only on the break of either of these levels, otherwise it will continue to consolidate.
A bearish break below 63,800, which seems likely, will open the door for a pullback towards the next demand zone at 61,750, where bargain hunters will look to enter the market.
However, a deeper correction towards ~57,800 cannot be ruled out.
In strong trends, a sharp flushout often occurs and is healthy for the overall uptrend of the market.
It is important to note that the market is still in a long-term uptrend, with new highs anticipated for 2024, unless it breaks the market structure which it is far from for now.
KSE-30
Looking at KSE-30 index, it broke above the ~19,800-20,000 range for first time since 2018.
Any retracement towards 20,000 level would offer attractive entry points for the sidelined capital.
KSE-30 has only risen around 15% after breaking the multi-year resistance of 20,000, suggesting that there is still room for further upside.
Based on technicals, the index is likely to test the next major resistance of 24,500 in the next 3-6 months.
Disclaimer: The views and analysis in this article are the opinions of the author and are for informational purposes only. It is not intended to be financial or investment advice and should not be the basis for making financial decisions.
