960414

INSIGHT

MARKET BEHAVIOUR AND ANALYSIS

Market high and dry, stable anyway

Market opened quietly which persisted all through the session. Values during the first half of trading nonetheless improved further at the mega counters spilling it over to the retail sector where the trickle down effect was more than evident.

The index which surged by almost 15 points failed to make even the brief stay as the news of bomb blast in Lahore started flowing in during the late afternoon trade negating the earlier gains, despite KSE 100 managed to finish nearly 6 points higher at 1561.16 against the weekend closing of 1555.30, volumes fell miserably to just above 11 million shares as compared to hefty 42 million in the previous session.

Hub and PTC registered further marginal gains. However most of the players remained glued to the sidelines which was reflected in the reduced volumes. Elsewhere some retail activity was witnessed in the banking, energy and chemical sectors where securities some marginal gains.

The market's ability to absorb the Sunday's shock reflects to an extent the underlying support at the current levels, however reduced volumes on the otherhand suggest the lack of confidence by the major players about the direction of the market in the short term. Massive discounting of budget proposals and political backfire may soon push the index towards the lower reams and as such any decision to enter the market at the current levels may turn out to be a suicidal move.

Index's efforts to recover single session's loss of 18 points (made on 9/4/96) in three consecutive rallies is petty appreciable but its failure to completely engulf the loss seems little bit worrying. However, we cannot generalize last hours performance on overall behaviour of the market because that seems due to fresh development of negative fundamental and is expected to discount very soon. Technically index succeeded to breach its last 10 days' trading resistance line and now is due for upward movement. On trading charts market is facing overhead resistance at 1562 which is also pivot point for Monday's trading. If market succeeds to breach that price in early hours and gain few more points then we can expect further rallies towards 1595 in coming sessions, however, failure, may resume negative trend for 20-30 points.

IN THE LIMELIGHT

LTV

Despite some gain in the index the scrip was unable to break the triangle formation, as we mentioned in our previous analysis, on Sunday it opened at 4.35 and closed just below at 4.30, so the sideways movement in a narrow range with a major support and resistance level of 4.00-5.00 is expected to continue in coming session. Trading range for Monday is between 4.25-4.75.

HUB POWER CO

On Sunday the market succeeded to breach its major resistance line at 29.75 and closed well above that price. Now it is facing next resistance at 31.00 and then at 32.50, previous life highs of the share. Technically, market is showing some room to breach immediate resistance but may not try to challenge its life highs in near term. Because it is not showing required potential to breach that price and it is expected that it may prefer to come down for technical correction or consolidate its values for some period of time to increase its potential to penetrate that major point. Today market is expected to find immediate support at 29.90 and then at 29.70. Price level of 29.70 is very important in the sense that if that level breached then market may face significant losses which seems, at current movement of time, least likely mainly on positive sentiments.

PAK SUZUKI

Pak Suzuki after making slightly bearish sign in Thursday's session confirmed the end of its break out and the price further fell to the level of 42.25. Despite current fall in the price the long term direction of the scrip remains to be positive, the levels of 39.50 and 36.00 are the strong supports which are unlikely to break in coming days. For Monday the level of 41.60 is the immediate support, whereas on the upper side 44.75 is the strong resistance. The scrip may stay at current level for a few more sessions and consolidate its position for further gains.

TRADING MAJOR MAJOR MARKET 30 DAYS 50 DAYS NET

SHARE TREND RANGE SUPPORT RESISTANCE SITUATION M.AVG M.AVG CLOSE CHANGE

KSE INDEX CONSOLIDATIVE 1550-1571 1540.00 1595.00 NEUTRAL 1604.00 1643.00 1561.16 5.86

PTC CONSOLIDATIVE 32.60-33.40 32.20 34.50 NEUTRAL 34.70 35.70 32.85 0.20

HUB CO CONSOLIDATIVE 29.70-30.50 29.00 32.00 NEUTRAL 28.48 29.04 30.10 0.65

FAUJI FERT. CONSOLIDATIVE 74.50-75.60 73.00 76.10 NEUTRAL 73.00 75.80 74.75 0.25

DEWAN SALMAN CONSOLIDATIVE 43.00-44.40 41.40 45.00 NEUTRAL 47.70 53.60 43.75 0.75

LUCKY CEMENT CONSOLIDATIVE 16.35-17.00 16.00 17.30 NEUTRAL 18.75 20.34 16.55 0.00