Bulls waiting for trigger at KSE

At the Karachi Stock Exchange, investors are increasingly finding it hard to make up their minds. After two weeks of gains, weakness crept back in as the benchmark KSE slipped 1.5 percent during the week ending May 6.
This see-saw movement eyeing 12000 plus points; has now kept on for a little more than 45 trading sessions. Yet for the odds stacked against the bulls, the index has gradually become skewed in their favour.
Although average turnover remained weak, the short-term index averages have been ticking up; KSE-100 managed to close last week above its 30-day and 50-day moving average points.
Average volatility - measured crudely by the difference between intra-day high-low - also rose last week, thanks to the steep fall on Wednesday, followed by a sharp rebound on Thursday. The move clearly showed that after gyrating for two months, the bulls are planning to put up an aggressive front.
Quite coincidentally, KSEs main drivers (read: foreign investors) are also back from their two-month strike. After an outflow of $7.3 million and $16.2 million in the last two months, respectively, foreign investors bought about $18 million worth of equities in the market last week, with about $12.7 million invested in just the last two days.
The supply was mainly provided by individuals ($40 million) and mutual funds ($7.4 million) in a week that saw Rs51 million eroded from the MTS counter - its biggest weekly outflow since the beginning of MTS in March.
Trading aside, last weeks snap movements on Wednesday and Thursday also substantiated another important element: rising bottoms. From the first bottom of 11,289 points in late February to 11,672 points last week, the bears are gradually losing their positions.
Yet the fundamentals dictate that there is no point dancing before the music begins. First is what KASB Securities calls the wrath of May, which is basically a function of pre-budget uncertainty.
Even if the stocks buck that historical trend, glaring uncertainties regarding the future of Pak-US relations and the outcome of the meeting with IMF officials in Dubai can keep the market dicey for some more time.
Indeed, it is still too soon to confirm whether KSE bulls would cross 12100-12300 to march towards 13000 points.