KSE Morning Call For Tuesday 8th June 2010

Investors were shy of new entries because of CGT, but the intraday traders belief this could effect their trading after 30th June. The incentive to the long term investors in CGT will welcome the long term investors and may attract the foreign investors to invest, but CGT will largely affect the local investors as they are more target the quarter results of the companies.

Investors are precisely looking into the benefit of the leverage product as the leverage specifically benefit the short term investments, so now they are going to pay the interest on their open positions with 10% CGT.

They also have concern on GST which may hit the inflation, so the conclusion of understanding was the devaluation of currency, declining foreign interest and shrinking volumes. Under prevailing circumstance we may see declining interest of investors in Karachi Stock Exchange, and they will wait until find a safe route to avoid the book keeping of their entries.


Market Expectation:
As it was mentioned in earlier call that, technically market signaling the hope of recovery with the fear of budget announcement and the move today attested the technical signal and market added more points to observe the aftermath of budget interpretation. Bulls still have the energy to drag market further up, but to do that chart requires the another green candle, as indicated earlier high volatile move seen in the beginning and than surprising points added to the index. Market still not reflects the proper understanding of budget announcement, so we still hold on to our statement for not holding many positions.

Currently Market closed out of the danger zone, as long as market is trading over 9,760 bulls can have the safe entries, and it is wise to place stop loss below 9,695 - 9,671, as breaking this level will add pressure to the market.

Foreign selling will add panic to the market, as for last couple of sessions no interest recorded in their portfolios. The other threat is continuation of huge selling of securities by the banks. In prevailing circumstances investors have two options, Buying to hold based on fundamental vision and all other entries must follow the technical calls followed by the precise levels.

That’s why we recommend TRADING ON LEVELS

Daily Candle
Open 9,542
High 9,826
Low 9,532
Close 9,792
Total Move 294
Gain 154.76
% Gain 1.61%

Updated Levels
10,138
10,027 – 10,011
9,980 – 9,963
9,845 – 9,827
9,760
9,695 – 9,671
9,577
9,540
9,485 – 9,465
9,425
9,382 – 9,372
9,232
9,167


Foreign Investors Activities: 7th June, 2010: Net Sell USD $ 343,242 (Source: NCCPL)


Disclaimer:
This commentary, key levels and views are not a recommendation to buy or sell, but rather a guideline to interpreting 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.