PSX market to remain trendless

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The Benchmark index started the last week on a negative note and continued within a thin range. During the week, the index posted a high and low of 42,388 and 41,676 respectively and closed at 41,948. Trading volumes clocked-in at 322Mn shares which are lower than the previous week.

Technically speaking, KSE100 Index is still struggling to find any clear direction on weekly charts however, on daily timeframe downside rejection is witnessed at 50-SMA as during the week, the index tested it multiple times and closed above this key moving average. On Daily timeframe, Relative Strength Index (RSI) after diving to 43 is now showing some strength above 40 levels and is currently at 47. Average Directional Index (ADX) is still below its threshold line of 25 which indicates that the market will remain directionless in the near future.

Overall we expect the market to remain sideways until the index breaks and trades above 42,500-42,700 levels, on the flip side index should hold the immediate support of 41,700 on daily timeframe to avoid any sharp decline. We recommend accumulation in sector leaders in the Cements, Steels and Technology space along with OMCs and refineries. We reiterate our stance that market has formed major bottom at 39,600-39,800.

Courtesy – BMA Capital Management Ltd.

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