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.
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