Karachi, July 08, 2013 (PPI-OT): KSE-100: Higher highs advocating a strong bullish trend
The index has given a higher high and a higher low continuously for the last five trading sessions which is a sign of a strong bullish trend.
According to KASB Securities Limited cements and oil and gas sectors are still looking attractive at current levels. It is recommended to accumulate positions on weakness.
Analysis and Overview:
The index gave a higher high and a higher low on Friday with increased volumes supporting the notion that it still has the potential to rise towards 22,500-22,600 points.
The index has been continuously posting higher highs for the last five trading sessions which suggests that it is still in a bullish trend. Moreover, it closed above its 61.8% retracement level of the fall from 22,881-20,854 points which is also a bullish sign.
Oil and gas stocks and cement sector still looks attractive at current levels. Meanwhile, RSI on the weekly chart is also rebounding from current levels. It is recommended to accumulate positions on weakness.
Pakistan Telecommunication Company Limited
Strategy: Buy on Weakness
PTCL formed a higher high and a higher low and close the session on its high which is a bullish sign. Moreover, 50DMA is on the verge of cutting 100DMA from below which is also a bullish signal. PTCL is moving along its trend line targeting PRs26.50. It is recommended to buy in between PRs24.80-25.00 with risk defined below PRs24.20 targeting PRs26.50.
Pakistan State Oil
Strategy: Buy on Weakness
Low volumes have been witnessed in PSO for the last 4 to 5 trading sessions. It is holding its trend line support which is at PRs311.00. However, it could give a pullback from current levels till PRs315.00-317.00 which is a good buying area. It is recommended to buy in between PRs315.00- 317.00 with risk defined below PRs310.00.
Pakistan Oilfields Limited
Strategy: Buy on Weakness
POL managed to close above its trend line which is a bullish sign. Moreover, formation of RSI suggests that it still has upside potential. It is recommended to buy in between PRs515.00-516.00 with risk defined below PRs509.00.
Oil and Gas Development Company
Strategy: Buy on Weakness
OGDC has formed a strong base at PRs224.00 and is trading above that level. Moreover, it also managed to close above its 50DMA which is a bullish sign. KASB Securities Limited recommends buying in between PRs227.00-228.00 with risk defined below PRs223.00.
Pakistan Petroleum Limited
Strategy: Buy on Weakness
PPL is trading above its previous double top which was formed at PRs226.00 which is a bullish sign. Moreover, it is also moving along its bullish trend line targeting PRs236.00. That said, it is recommended to buy in between PRs224.00-226.00 with risk defined below PRs220.00 targeting PRs236.00.
Nishat Mills Limited
Strategy: Buy on Weakness
NML formed a higher high and a higher low which is a bullish sign. Moreover, it has formed a double bottom on weekly chart which is also a bullish formation. That said it is recommended to buy on weakness with risk defined below PRs97.60.
National Bank of Pakistan
Strategy: Buy on Weakness
NBP formed a higher high and a higher low which is a bullish sign. Moreover, the higher high is also supported by increase in volumes which is a good sign. That said, it is recommended to buy on weakness with risk defined below PRs43.40.
MCB Bank Limited
Strategy: Sell on Strength
MCB is trading below its 50DMA which suggest that it could target its 100DMA which is at PRs228.00. It could give a bounce from this level till PRs258.00-260.00 but that should be utilized to sell. Exit on strength with risk defined above PRs262.00.
DG Khan Cement Limited
Strategy: Buy on Weakness
DGKC is moving steadily along its trend line and could now target PRs93.50. That said, it is recommended to buy on weakness with risk defined below PRs80.90.
Lucky Cement Limited
Strategy: Buy on Weakness
LUCK is registering new highs in the last few trading sessions with increased volumes which is a bullish sign. Buy on weakness with risk defined below PRs208.00.
Bank Alfalah Limited
Strategy: Buy on Weakness
BAFL broke above its previous double top formed at PRs19.52 and closed at that level which is a bullish sign. However, the current formation still looks tricky and it is better to exercise caution.
Engro Corporation Limited
Strategy: Sell on Strength
Engro tested its rising trend line resistance at PRs144.00 and then moved lower which is a bearish signal. Moreover, it has also formed an engulfing bearish pattern which is a bearish sign. Sell on strength with risk defined above PRs146.00.