In line with experts view this morning, the 100 Index incurred heavy losses in today’s session (-936.37pts or -2.46%) after yesterday’s retreat started a vicious circle of profit taking. After rallying more than 10,000pts in just 3 months, from 28,670 (intraday low from 19th August 2019) to 38,911 (intraday high from 19th November), the 100 Index is in desperate need for a decent correction.
From a technical point of view, the weekly chart has evolved into a potential shooting star (a bearish candlestick with a long upper shadow) which can have bearish implications. Major drag to the 100 Index came on the back of panic selling in Materials (-2.79%), Energy (-2.27%) and Financials (-2.06%) amid heavy losses in ENGRO (-2.52%), LUCK (-4.62%), FFC (-2.10%), DAWH (-2.36%), DGKC (-5%), EFERT (-1.73%), PSO (-5%), PPL (-2.37%), POL (-2.42%), OGDC (-1.28%), HBL (-1.79%), BAHL (-2.62%), MEBL (-5%), MCB (-1.39%), NBP (-4.99%), BAFL (-1.92) and UBL (-0.74%) as FOMO gets a reality check after the benchmark Index came close to a multi-year trendline resistance earlier this week.
Market participation for the 100 Index clocked in at 146.54mn shares from 186.50mn shares in the previous session (-21.43% on d/d basis). Major contribution to total market volume came from KEL (-3.61%), PAEL (-4.76%) and TRG (-5%) churning 31.96mn shares out of the All Share volume of 232.57mn shares. Daily traded value for the 100 Index clocked in at USD 41.64mn from USD 60.71mn in the previous session (-31.42% on d/d basis); PSO (USD 4.04mn), LUCK (USD 3.89mn) and DGKC (USD 3.88mn) were among top contributors from traded value perspective. The KSE100 is 11.2% below its 52-week high from Feb 6, 2019 and 29.4% above its intraday low from August 19th, 2019.
Technically speaking, the 100 Index extended its losses amid thin participation (vol: -21% and val: -31% on d/d basis) after it met stiff resistance earlier this week. Due to the current overbought situation, we expect the correction to continue and the 100 Index may trade lower in the coming sessions. A test of 38.2% retracement (35k) of the recent rally that started from 28,670 cannot be ruled out. (Courtesy: Intermarket Securities Limited.)