KSE-100 Index Nears Overbought Territory, Investors Advised Caution

Karachi, The KSE-100 index, a key benchmark for the Pakistan stock market, closed up 802 points at 62,493 in its latest session, signaling a continued positive trend. However, with indicators suggesting an overbought condition, investors are advised to exercise caution.

According to JS Global, the KSE-100 index is expected to revisit its recent high of 62,913, and a breakthrough could target 63,970 points. On the downside, the index is anticipated to find support between 61,640 and 62,065 points, with a potential decline extending towards 60,328 points if these levels are breached. The RSI (Relative Strength Index) and the Stochastic Oscillator, both key indicators of market momentum, are currently in the overbought range. This suggests that the market may be poised for a possible pullback or consolidation, leading to the recommendation for investors to remain cautious at current levels. The established support and resistance levels for the index are at 62,065 and 62,917 points, respectively.

The report also highlights specific opportunities within the market. Pakistan State Oil (PSO) has seen a key resistance breakout, and the suggested strategy is to 'buy on dips,' targeting prices of Rs190.15 and Rs202.14, with a stop loss set at Rs179.90. Similarly, Oil and Gas Development Company (OGDC) has generated a Buy signal Convergence Divergence (MACD) indicator. For OGDC, the recommended strategy is also to 'buy on dips,' aiming for target prices of Rs117.85 and Rs119.58, and a stop loss at Rs111.24.

The insights from JS Global provide a nuanced view of the current stock market dynamics in Pakistan, especially for key players like PSO and OGDC. Investors are navigating a market that, while trending positively, is showing signs of being overbought, necessitating a more careful and strategic approach to trading in the near term.