Elixir Securities Limited – Elixir Grid

Karachi, December 04, 2017 (PPI-OT): KSE100 – Bullish Correctional Wave Likely to Continue

The benchmark KSE 100 Index dipped towards 39,500/ 450 key support area near the weekly 144-days EMA where it found a solid support that helped it bounce sharply towards the first tier descending resistance, thus forming a “Hammer” candlestick pattern on its weekly time frame. This keeps the bullish correctional wave and outlook intact for this week as long as this key support is holding.

On upside, if resistance at 40,100 gives way, which is our base case, then there is further overhead resistance seen until 40,650. This area also coincides with 50% Fib resistance of 41,836/ 39,462 descend, adding more to its strength as a ceiling. Ability to hold onto this area would be a sign of continuation of bulls towards the next resistances at 41,400/ 500 levels. Stochastic and RSI are also on the move up from oversold region suggesting that the buyers are taking control of the price action.

On the flipside, a downturn from 40,650 resistance would expose supports at 39,851 (38.2% Fib of 39,462/40,091 ascend) and 39,777 (50% Fib of 39,462/ 40,091 ascend) while a break below this would re-test the former lows and dynamic support area at 39,500/ 450 levels. Below here, if seen, would be a sign of further bearish correction targeting the next supports at 39,200 and 38,550.

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