Technical Analytical Outlook
Premature Profit Taking By Nervous Players Brought The Market Down On Friday!!!
Premature profit taking by nervous market participants brought the market down on Friday despite UPFA Government’s landslide victory on Thursday which confirms the strength and stability of the present Government. Market’s depressed mood was mainly due to profit taking and position shifting by investors holding high market cap Carson’s Group shares. However the encouraging shift towards ‘popular stocks’ that are likely move up during the coming weeks kept the market well supported at current levels.
There is an unfounded fear in the market that the indices would come down sharply towards the end of the month when the SEC deadline for reducing margin exposure arrives. However the truth is all brokers have already either stopped allowing buying on Credit or moved client accounts to margin trading facility providing banks, finance companies and associate companies. Bargain hunting big investors are patiently waiting to collect the shares dumped by ill-informed small retail investors during the closing weeks of the month of March. Mid April may be quite interesting since we may witness a massive rise in indices after the small players realize that their fears were unfounded.
Despite last week’s ups and downs in the market the RSI’s of ASI & MPI daily charts are still at a low 42 & 31 and ASI and the MPI are now moving gradually towards the Middle Bollinger Bands underlining the bullish sentiment that has suddenly started developing at the market. RSI’s of the indices are still below Neutral Level (below the 50 level) and the market has potential to move up significantly from the current position. We may see an unprecedented bull run in the market during the coming weeks.
Considering the current level of the underlying securities their warrants are being traded in the market at grossly underpriced levels. The extent of undervaluation of most of these warrants is evident from the extract of relevant information from our warrant price calculators given below. (pl. see our warrant price calculators at our website’s research section.)