PAEL Chart 29th September 2014

This is the daily chart of PAEL. The script has made a high of 34.39 on 05/09/14 and right now the price of the script stands at 26.41 which is a difference of  7.98 rupees. it has broken the support of rising wedge, current correction on fibonacci recognition stands at -111%, RSI of 32.21, volatility of -18.74, momentum of -4.05, MFI 11.53. The last support from the last bull run stands at 26 which if broken will lead to the support levels of 24 to 24.40. 

No one can predict when will it take a bottom and start to resume its bullish run again because in trading you will never know the bottom price of a script, but an investor would buy this script right now because he/she will know the potential of this script in long term. 

All the technical indicators suggests right now to jump in this script when everyone is selling this script in panic, which means a risk to the buyer, but high risk means high return and only those will win who will take high risk in it.  

SHEL 25th September 2014 Chart

I think the resistance of 300 is too much of a asking for this script. This was second attempt to cross 300 since the fall from 360. 

PSO Chart 23th Sep 2014

Current price of the script is 368.18. Today movement has inched closer to the breakout of 373.76 on falling wedge. The breakout should be achieved with higher volumes or else it would not sustain the breakout. If it is achieved, the script has to close the window from 372-382.

Berger Paints 18th September 2014

The 18th September chart of berger looks like a evening star pattern which is bearish in nature. There is also increase in volumes from 16th september with highest volumes on 18th september. 

The Market Is Never Wrong

Steve Nison on "market is never wrong"

"One of my non candlestick seminars is called the "Techniques of Disciplined Trading Using Technical Analysis." In it, I discuss the importance of a disciplined approach to trading. To convey this idea, I use the word "discipline" as an anagram. For each letter of the word DISCIPLINE I offer a trading rule. For the letter N my rule is "Never trade in the belief the market is wrong.

What do I mean by the expression, "the market is never wrong?" It means do not try to impose your beliefs on the market. For example, if you are firmly convinced crude oil is going to rally, wait until the trend is heading north before buying. Say crude oil is in a bear market. If you buy in the expectation that a bull market will materialize, you are then trying to impose your hopes and expectations on the market. You are fighting the trend. This could be disastrous. You may ultimately be correct in your bullish viewpoint, but by then it may be too late.

As an analogy, imagine you are driving along a one-way street. You notice a steamroller going down this one-way street the wrong way. You stop your car, take out a sign (that you always carry with you) that reads, "Stop, Wrong Way!" and hold it in front of the steamroller. You know the steamroller is going in the wrong direction. But the driver may not see you in time. By the time the steamroller turns around, it could be too late. By then you may be part of the pavement.

So it is with the markets. If you are bucking the trend, your outlook may turn out to be correct. But by then it may be too late. Margin calls in futures may force you out of the position before your expected move occurs. Or, worse, in the end, you may be right, but by then you could be broke.

Do not try to impose your will on the markets. Be a trend follower, not a trend predictor. If you are bullish, jump onto up trends, if bearish, hop onto downtrends. one of the Japanese books I had translated expresses this idea almost poetically, "buying or selling from the beginning without knowing the character of the market is the same nonsense as a literary man talking about weapons. When faced with a large bull or bear market they are sure to lose the castle; what seems safe is infinitely dangerous. . . . Waiting for just the right moment is virtuous and essential."

Importance of Number three in Technical Analysis

The following is a quote from John Murphy's book Technical Analysis of the Futures Markets:

"It's interesting to note how often the number three shows up in the study of technical analysis and the important role it plays in so many technical approaches. For example, the fan principle uses three lines; major bull and bear markets have three phases (Dow theory and Elliott Wave Theory); there are three kinds of gaps some of the more commonly known reversal patterns, such as the triple top and the head and shoulders, have three prominent peaks; there are three different classifications of trend

(major, secondary, and minor) and three trend directions (up, down, and sideways); among the generally accepted continuation patterns, there are three types of triangles-the symmetrical, ascending, and descending; there are three principle sources of information-price, volume and open interest. For whatever the reason, the number three plays a very prominent role throughout the entire field of technical analysis."

PNSC Chart 12th September 2014

"Hanging man" is a bearish candlestick which can be significant trend reversal. An ideal hanging man would have a short real body with long lower shadow and no or very little upper shadow. A major resistance lies ahead for pnsc. A number of times in past, the script tried to cross the value of 78 which it failed multiple times. if it breaks the resistance of 78 this time with a staying above it, it will become a support level for it, otherwise caution should be exercised. 

Attock Refinery Double Bottom Formation?

Double bottom formation in artl? Confirmation will be supported if the market opens on monday and the support line of 184.50 is not broken which will create a double bottom in atrl. the resistance of 197 if broken will create a breakout for successful completion of the pattern. 

PSO Chart 03rd september 2014

Penetration of more than 50% of dark cloud cover into White body of yesterday. Volumes also increased, suggesting a buying blow off. Today's the chart opened up above the resistance level of 387 but could not maintain it. if, close above the high of today's dark cloud cover, would be considered another bullish rally, otherwise it would be a trend reversal and high of dark cloud cover would be a top.   

Thoughts about -4.5% drop

The karachi stock exchange today crossed a crucial resistance level of 29200. I look back on the day, 11th August 2014, when market just took a plunge into 4.5% drop due to the political crises. a lot of people just sold their stocks expecting a major crash in the market, all fearing the 2008/2009 financial crash to happen anytime soon and very much the things were looking that way too. Everyone just wanted to get out of the market and invest in something which will keep their investment safe. I myself got out of the stocks in july and august as well due to the fears of financial crash but if we look today, the market is standing right there where it took a drop on 11th august, this is the beauty of this market, creates fear, takes everything you have, and makes you regret about it. 

so why is the market is so much stronger now, not what it used to be. I personally think, the foreign participation in the market has really made it a stronger place. the market is no more in control of big fishes who when got panicked, sold their stocks, and individuals started to follow the herd. This market is not what it used to be in 2008 anymore. The net buy/(sell) by FIPI since last june in karachi stock market has been $404,803,388. This is hefty amount of buying that foreigners have done since nawaz sharif government came into power. 

The stock market will take future plunges like these, may be tomorrow, next month, or next year but only people who are in the market just for the sake of investment, will benefit from it. Gone are those days when one would make enough money in day trading. international corporations are now hiring quats into their organisations who comes up with algorithmic trading systems to perform high frequency trading. only a few good day traders can beat them. God knows when they will be coming to Karachi stock exchange, so the best option right now would be to buy good blue chips stocks and hold them at least for 3 months. 

where's kse 100 index moving 02th september 2014

where's kse100 index moving? 1st September 2014

Technically the market should bounce back because double bottoms have also been created on 12th August 2014 and 28th August 2014. Having said that, any disturbance to the investor confidence will result in the chart dated 27th August 2014.