Weekly Forecast for KSE for 4th Week of Nov. 2009

Weekly Forecast for KSE for 4th Week of Nov. 2009

Market Technically: Bullish
By
Khalid Saifuddin
Friday Nov. 20th 2009

I am happy for all those who accurately followed the live calls and morning briefing, Shukar Alhumdulillah; despite of volatility market made possible for the day traders to book their returns. I hope you guys now realized why I was not encouraging the banking sector all week, likewise the performance of Cement sector. But tell you the securities performance was little weird.
I see comfortable position on political side, though we did not see any development, but government gaining confidence, the opposition once again on back foot.
The New government formation in Afghanistan made Pakistan more important in region. Leverage product on its way, government comfortably raised the power tariff.
Currently NFC award meetings enhanced the brotherhood among the provinces, now the next meeting in Lahore will bring some positive results.
Now the 9,425 will be giving resistance to the market and once breaking this level, then we will be having dancing Bulls everywhere. This week we achieved some of target buys for the last quarter portfolio.
On the other hand breaking 9,229 may bring Bears back in ring. So far the FIPI and the local institution supported market by buying new positions and I am sure this support will be continued as most of the scrip still trading on discount rate.

Recommendation:
Market is in Bullish phase, it is required to be specific on your scrip selection. Please follow the morning call and our key levels for your trades.

Key Levels

9662
9572
9484
9425
9229
9123
8952

Market Fundamentals: Weekly Snapshot
By
Farkhunda Jabeen
Friday Nov. 20th 2009

Foreign-awarded investment appetite should redress local threats’ upshot.

Cross-border stream of equity investments is portraying mount in financial globalization. The increasing foreign reserves coupled with improved appetite for foreign investors to invest in our capital markets would help reduce the country’s risk premium and so the cost of capital. This in turn should prop up local investors to invest in money-spinning projects and thus further boost the performance of capital market. In part of our banking sector, loan portfolios are apt to recuperate in forthcoming quarters, primarily in correspondence to the risk-avert attitude of banks toward fresh lending. Though the rebound is still at its infant stage and can witness sector’s depression on account of some prevalent factors, SBP’s monetary-freeing initiative would be a favorable driver for fresh banking rally. However, the upcoming threat for our already ramshackle industry and trade is looming in form of hike in power tariff and surging imported inflation. At local level, SPI has also increased not only for the lowest income group by 1.18 percent but also for combined group by 0.92 percent on weekly basis, bullying superfluous push in consumption levels. Threat of social insecurity is also diverting FDI towards foreign aids pushing the country under foreign dependencies. This calls for proper coordination among fiscal, monetary and foreign trade policies as well as control in political and social uncertainty to at least balance the economy in severe slam stage. Until these initiatives, foreign portfolio investments and softening monetary condition should alleviate the outcomes of these threats to some extent leastways.

We congratulate our clients that our target buy levels given in Commercial Banking Report on Nov. 5 have been hit.


Forex
By
Khalid Saifuddin
Friday Nov. 20th 2009

I hope you might have profitably traded with our accurately tested buying calls.

Pair rotation glimpsed.
Slow revival of U.S. economy signals going on rally but volatility may take its toll.

After shaking off an aborted rally aloft, Euro deflated against dollar, followed by downside in European equity markets on account of an array of second-rate corporate news and commodity price declines in coupled with revised OECD GDP forecasts. Rebound in dollar was driven by Federal Reserve Chairman Bernanke’s lashing comments regarding implications of changes in the value of the dollar as well as by interest rate cut for extended period.
Going forward, U.S. economic indicators depict modest recovery owing to little rise in retail auto sales, industrial production and housing. This slightly raised core inflation. Yet, the pace of growth seems too slow to keep the rotation. Unemployment is forecasted to be sub-par for at least first two quarters of the coming year. The unemployment may further bring about credit risks for consumer and real estate debt. Interest rate cut and fiscal spending are expected to settle at the same track. However, upcoming mid-term elections in 2010 would squirt volatility and hence interest rates and dollar would prone to political pressures on Fed and vagaries of foreign central bank’s support for the dollar.

Trend: Sideways – empowering Bears (time 2:36pm Pak.Time)
Recommendation: Enter with Short and Follow the key levels (time 2:36pm Pak.Time)

EUR/USD is staying in range of 1.5000 and 1.4845. The selling pressure continuously pushing down the EURO, though bulls are striving hard to get back into game; very soon we are going to see the breakout in pair. Intraday possibilities become narrow; the short trades will be appreciated.
Target your short around 1.4845 and if you trail your stop loss then you can drag your target up to 1.4780.
I don’t see much of hopes for bullish sentiment in short term; you may see some retracement of the trend. Well I am more concentrating on short term trades to benefit most of the day traders.

Extract from Successful Calls Last Week

Symbol Action Short Price Buying Price Entry Time Exit Time Achieved Pips
EUR/USD S 1.48762 1.48546 11/20/2009 5:18 11/20/2009 7:01 21.6
EUR/USD S 1.48762 1.48537 11/20/2009 5:18 11/20/2009 7:01 22.5
EUR/USD S 1.49126 1.48846 11/17/2009 5:19 11/17/2009 7:57 28
EUR/USD S 1.48783 1.48308 11/20/2009 5:49 11/20/2009 7:07 47.5
EUR/USD S 1.48736 1.48308 11/20/2009 6:01 11/20/2009 7:07 42.8

Symbol Action Buy Price Selling Price Entry Time Exit Time Achieved Pips
EUR/USD B 1.4913 1.49227 11/20/2009 1:57 11/20/2009 2:04 9.7
EUR/USD B 1.48135 1.48235 11/20/2009 7:09 11/20/2009 7:12 10

To receive further live calls on EURO/USD with stop loss, please contact us.
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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.