Elixir Securities Limited – Elixir Grid

Karachi, August 15, 2017 (PPI-OT): KSE 100 – Challenging the Rising Channel Support

The benchmark KSE 100 Index is still oscillating inside an ascending channel, as visible on its short-term time frame. It seems to be in a bullish correction mode albeit on low volumes ever since it encountered resistance at the top of its rising channel at 47,241 level. At this point, the Index is testing the channel support at 45,260 mark and might be due for a bounce if the trend remains intact (Chart #1). A larger correction could last until 50% Fib levels or 45,135 (50% Fib of 43,027/ 47,241 ascend)(Chart #2). The daily studies of momentum indicators reveal that stochastic, is in oversold conditions, which means that sellers might need to take a break and let buyers take over.

More buying pressure could be seen once this oscillator climbs back above the oversold area. RSI however is pointing down but approaching the oversold area. A bounce from either support could lead to a climb up to 46,000/ 46,250 major resistances. A sustained progression above 46,250 would open further upside to the levels of 47,000 and 47,240 next.

On the flip-side, a continued drop below 45,135 support would however dampen any bullish view and suggest that the recent up-trend might be over. In that case, a break past nearby support at 44,860 would spur a move towards the former low at 44,235.

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