Dancing Bulls in Karachi Stock Exchange

Weekly Forecast for KSE for 3rd Week of Nov. 2009

Market Technically: Bullish

By
Khalid Saifuddin
Saturday Nov. 14th 2009

Shukkar Allhumdollialh market was able to close 1.34% above the last week closing. Well I do not call this a complete sign of bullish trend, but I can see some fresh and vibrant buying and developing bullish sentiments from here, it is time for everybody to reschedule their portfolios targeting the Feb-Mar, 2010, as most of the scrip are trading on discounted rate with desire to go up, and some sectors are about to perform good in their last quarter.
I like to tell you that market got fair support but trend is not stabilized yet. We are going to see much of resistance between 9132 and 9175, the stability in trend will occur after breaking 9245.
Increase in power tariff may rose the inflation, the economic side of the country is still not satisfying the investors, we do not see any concrete actions and decisions for the development of the country, manufacturing concerns still under crisis, couple of sectors are under strike, the shortage of gas may hurt fertilizers in future, ongoing textile sector problems added up with the CNG crisis. The arrests of so many terrorist from different cities make people think of their network in the country and make investor think of the security of their life and investment.

Recommendation:
Market is in Early Bullish mode, Volatility will exist until the market achieves its minimum required volumes; I recommend all of my traders/investors to hold their positions for now and check their morning calls for profit taking. You might see range bound activities until market strongly breaks the 9245 this week. Focus on key levels and the portfolio investment with specific selection of scrip. Some short term buying possibilities still exist in the market. The ultimate hopes are still bullish; market will give a chance to the target buyers for high returns. Monday market must close above 9038.

Market Fundamentals: Weekly Snapshot

By
Farkhunda Jabeen
Saturday Nov. 14th 2009

Buying levels tested for banks.
Opportunity is ahead to turn and stay green for long.

Most of the scrip tested with our buying levels given for banking sector, enabling investors to recognize the chance of profit taking in the critical nascent stage of the sector’s recovery.
Going forward, opportunity is ahead for KSE-100 index to stay green for long on back of some prospective sectors.
Among them, progress can be ascribed to OMCs which are probable to reshuffling and can brace their cash position with the streamlining demand of furnace oil backed by expanding power sector. Rebound in Large-scale manufacturing would also foster OMCs’ performance by improving HSD demand. Though the recent 24% decline in sector’s topline was due to the oil volatility, acceleration in global economic outlook may raise average oil prices in coming years, creating fortuity for OMCs in terms of inventory gains to offset losses. Besides, with the government initiative to resolve the chaos of circular debt of Rs. 500 billion, OMCs would stand as beneficiary.
With regard to increasing foreign inflows, remittances are continued to remain vigorous. An effective scheme has also been launched by SBP to entice banking sector for securing further remittances which would facilitate banks in sustaining non-interest income. Over and above, the recent practice of SBP to provide liquidity on weekly basis is expected to extend to a higher maturity time which would not only lead to liquidity uphold for longer phase but also reshuffle private sector credit growth.
At macro level, third IMF review is on the move and should lead to the release of the next tranche of around US$850 mn over the next few weeks. IMF endorsement on country’s economic performance has played most of its part to reinstate the confidence of local and foreign investors.


Forex

By
Khalid Saifuddin
Saturday Nov. 14th 2009

Weekly Commentary

Euro zone crowding out of the slump; buyers’ crowd moving to Euro against Dollar
Euro/USD pair has lost upward momentum on the back of worst than expected U.S. data released, as well as little bearish U.S. indices. The resultant risk-averse sentiment of traders is likely to favor this plunge.
Beneath the external market’s antics, the pair is expected to follow the same track intrinsically. High unemployment rate, low wage growth, and shrinking credit demand in U.S. is moving its currency under pressure and weakening investor’s confidence as well. This, in couple with decreased interest rate may cause hot money to leave the country. Euro, on the other side, has moved out of the worst; although the recovery is flat, the GDP of euro area as a whole has raised by 0.4% after five successive declines. This has given room to ECB to cut interest rate which may award the euro an additional boost.


Some of Our Successful Buying Calls Last Week

15 minutes trade in Euro USD

Symbol Action Short. Price Buying Price Entry Time Exit Time Achieved Pips
Euro/USD Short 1.4909 1.4897 11/13/2009 14:51 11/13/2009 15:07 0.0012

46 minutes trade in Euro USD

Symbol Action Long. Price Selling Price Entry Time Exit Time Achieved Pips
EUR/USD Long 1.4834 1.4862 11/13/2009 9:56 11/13/2009 10:42 0.0028



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Disclaimer: This commentary, news or key levels are not a recommendation to buy or sell, but rather a guideline to interpret the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. We accept no liability whatsoever for any loss arising from any use of these levels. However the author DOES NOT GUARANTEES the accuracy of information provided on this report and is NOT RESPONSIBLE FOR ANY ERRORS AND/OR OMISSIONS.