Karachi Stock Exchange for this week

Weekly Forecast for the 4th week of 2010
Congrats: for following in time profit taking call


By
Khalid Saifuddin
Farkhunda Jabeen
Friday, 22nd January, 2010

Market Outlook:
Past week begin with the range bound activities resulted in bearish closing with declining -1.46% below the earlier week.
Overall trading activities were focused on profit taking volumes rose by 46% and the FIPI decline by 0.76%. Despite all these facts foreign reserves are still growing.
Market has initial resistance of 9,797 for Monday and utmost resistance will be 9,873. As per current scenario market is still under selling pressure, breaking 9,721 on Monday will elevate the selling pressure in market. The upward trend on Monday will be an opportunity for traders to their profit taking, as we already mentioned in our last report that target achieved, now the bullish hope begin over 9,933.
Market may show some support around 9,658 and breaking this level will extend the down slide up to 9,411.
I do not see any stable indication for buyers but the profit taking, but I see amazing possibilities for those who prepared to reschedule their portfolios for first quarter results.
The agreement between PSO and Wall Street exchange, MCB filed suit in Sindh High Court and the expectation of Power tariff increase of 24% can be the major concerns for traders this week.
The ongoing NRO consequences for president getting worst after the French government request to other nation for the evidence collection. The lawyers are also planning some movement to enforce the SC decision. All these issues are enough to shake the investor’s confidence.
As we are experiencing trading on levels benefit in all type of market behavior so I still see great potential for local traders by honoring the precise levels of the market. I still prefer some profit taking followed by the target buying of selective scrips.

Key Levels
10,258
10,061
9,999
9,658
9,563
9,411

Market still looks fabulous and energetic for the near future. Key advice is to reschedule your portfolios and gear up for March, 2010. Buy recommended on given support levels for high returns.

External front glancing off:
The massive inflow of remittances, at last, recuperated our ever-expanding current account deficit. According to the data released by the State Bank of Pakistan, the current account deficit was down by 78 percent to stand at $1.76 billion during July-December, 2009 as compared with $7.85 billion in the parallel period last year. However, at the domestic side, where our economic activities are interpreted by rise in imports, the triumph may not provide any ground for complacency, since a sharp fall in imports has been depicted. But, the shrink of C.A deficit can help in overcoming major structural problems of our economy. What’s encouraging here is that exports of textile industry showed ‘out of the blue’ growth of over 15 percent in December, which is an optimistic mark for overall exports of the country. Although, one-time remittance flow was also a cushion for our C.A deficit this time, recent innovations in formal remittance channels and recovery in global economy is expected to give steeper northward direction to remittances in future. On the other side, what’s hurting is that FDI is going downward, a key driver of our national output as well as external capital account.

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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.