Elixir Securities Limited – Elixir Grid

Karachi, February 12, 2018 (PPI-OT): KSE100 – In The Middle of a Correction Pattern!

The benchmark KSE 100 Index recovered sharply from an intra-day low of 43,286 to settle above 43,800 level on last Friday, hence indicating that the medium-term trend continuation can take place as the Index is in the middle of a correction pattern on its daily charts which appears to be stalling slightly above 100% Fibonacci extension level or 43,134 support area (100% Fibonacci extension of 45,496 to 43,993 from 44,638). At this point, the weekly time frame also reveals that the Index is in a strong bullish mode for the last few weeks so the recent decline to 43,286 is just a temporary pause within an uptrend.

Going forward, if the nearby resistance at 43,962 gives way, which is our base case, then the Index could continue with its climb to 44,130 (38.2% Fib of 45,496/ 43,286 descend) and 44,392 (50% Fib of 45,496/ 43,286 descend) next. Ability to hold onto this area would indicate resumption of the bullish spell towards the former high at 45,500 level which might act as key barrier in the first attempt. We will look for extended targets on a break of this major snag.

On the flip side, any downturn from near-term resistances would expose supports at 43,668 (daily 21 EMA) and 43,556 next while a break below this would turn attention to 43,134 and 43,080 supports. This area coincides with long-term moving averages supports i.e. weekly 55 EMA and daily 233 EMA respectively, adding more to its strength as a floor.

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