Karachi, July 15, 2023 – Analysts at JS Global have cautioned that Pakistan stocks may undergo a corrective trend during the next week, with the benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) experiencing a slight decline.
After reaching a high of 45,971 points, the KSE-100 index closed at 45,267 points, down 248 points. The trading volume stood at 489 million shares, showing an increase compared to the previous week’s 450 million shares. According to analysts at JS Global, the index is likely to re-test support at 45,256 points. A fall below this level may initiate a corrective trend, with potential targets at 44,990 and 44,385 points.
READ MORE: Pakistan Stocks Shed 199 Points as Correction Continues
Analysts also noted that any upward movement will face resistance in the range of 45,500-45,750 points. The Relative Strength Index (RSI) and the Stochastic Oscillator have both shown a downturn, further suggesting a corrective trend ahead. Additionally, an engulfing bear candlestick pattern has occurred, providing additional strength to the bearish view.
Meanwhile, analysts at Topline Securities reported that the KSE-100 Index gained 1.95 percent on a Week on Week (WoW) basis. Factors such as attractive valuations and the resumption of the IMF program, unlocking further financing for the external account with support from friendly countries, have continued to attract investor interest in the market. Saudi Arabia and the UAE have deposited $2 billion and $1 billion, respectively, while more inflows are expected from multilateral development partners in the future.
READ MORE: Pakistan Stocks Experience a Decline of 248 Points in Profit-Taking Session
However, profit-taking was observed towards the end of the week, as the index experienced two consecutive negative closings. Other significant developments during the week included remittance numbers for June 2023 amounting to $2.2 billion, car sales numbers (including non-PAMA members) for June 2023 totaling 7,000 units (a 10% MoM increase), and the LSM Index number for May 2023 showing a 5.9% MoM increase but a -9.9% YoY decline.
The outgoing week witnessed healthy investor participation, with an average traded volume of 440 million shares and a value of Rs.12.4 billion. In terms of flows, companies, individuals, foreign corporates, and banks purchased equities worth $3.8 million, $2.87 million, $2.28 million, and $1.38 million, respectively, as of yesterday’s close. However, mutual funds and other sectors sold equities worth $4.93 million and $3.56 million, respectively, as of yesterday’s close.
These trends indicate that the Pakistan stock market may experience a corrective trend in the coming week, influenced by various factors such as technical indicators, global economic conditions, and investor sentiments. Market participants will closely monitor the support and resistance levels, as well as any significant developments that could impact the market’s direction.
READ MORE: KSE-100 Index Surpasses 45,000 Points, Reaches 14-Month High
