AKD Securities Limited Equity Research – Trigger Shark

Karachi, February 22, 2016 (PPI-OT): Bearish Theme in Play

Bearish theme remains intact contained with a falling channel with the 14-day RSI trapped in the bear market momentum oscillation readings. Immediate weakness towards 30,485 level would expose much deeper supports around 29,023 ~ 28,758 and 26,658 levels. Nearby resistance clustered between 31,389 and 31,702 levels is seen blocking any recovery attempt.

According to AKD Securities Limited’s preferred Elliott wave count, the index is correcting lower in the fourth primary degree wave which is retracing the most powerful third primary degree multi-year rise that started off from Aug’11 low of 10,760 level, and zoomed towards Feb’15 high of 35,055 level. On an intermediate degree, the first leg of correction (wave (A)) was completed at Mar’15 low of 28,648 level which followed an irregular upwards retracement in wave (B) towards Aug’15 high of 36,471 level.

Entering the final and dangerous wave (C) fall, the KSE-100 Index has attained AKD Securities Limited’s minimum downside objective of 30,063 level. Extremely weak momentum readings suggest that this fall can deepen towards 27,232 — 25,779 levels in expanding flat scenario. Completion of ensuing primary degree correction / consolidation continuing since Feb’15 would mark the fourth primary degree wave bottom to initiate a renewed bull market in the fifth Elliott wave rise. AKD Securities Limited continues to prefer a defensive stock selection strategy at present waiting for the correction / consolidation to complete its structure.

13-day Leaders: JDWS, FML, POL, EFUG, EFUL, GHGL, SNGP, IBFL, ABOT and DAWH

13-day Laggards: SSGC, FEROZ, PSMC, PAKT, ARPL, EFERT, ACPL, NCL, EFOODS and PKGS