KSE 100 Index has been trading mostly bullish since Mar, 2020. The five red wave pattern (1-5) completed its minimum impulse but this upward trend still need confirmation of medium term top. So far all conditions of five wave rally are met now, there are no necessary preconditions to continue the construction of the upward section of the trend. Weekly long bearish candle will be the first sign that blue wave 1 is completed and medium term top is placed.
The plenary of the FATF are being held today 28th Jan, 2021 in France that will discuss Pakistan, either to keep it on grey list for another extended period, or to remove it from the grey list. If it will remove Pakistan from gray list, the we will see a last surge in KSE 100 index but up side is limited from now.
Once this uptrend finish, we will see new wave marking implies the formation of a new downward trend in corrective wave. If so, the index may continue to decline in correction wave around the minimum 39000 mark which is where 38.8% Fibonacci level. If this correction extend, then we will see level down to 37000 (50% Fibonacci) & 34000 (61%Fibonacci) mark. But in my views, the ideal target of corrective wave is near 61% Fibonacci Level which is one level below the impulsive red wave 4.
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