Many investors are confused as they were not expecting the market to reach 11,900 on Dec 2010. To be honest, I also was not expecting this. As you all know my target was 11,200. This is certainly not the right time to enter in the market. I will come up with my target for 2011 very soon but for right now I believe it is better to be on a defensive side.
Amid of current political drama with MQM threatening to go out of Government and we know if this happened then law and order situation of Karachi which is already not good might get worse. Secondly rising oil prices, no news of leverage product, rising interest rates, and high fiscal deficit, nothing is good for market right now. Wait here, then why the market has performed until now? What has driven the market then? The answer is "Corporate Profitability". Companies has posted very good results and this is the most fundamental driver of any stock market. But for right now, I believe even corporate profitability might not be able to drive the market further up. We need some good news regarding the issues I discussed above. Therefore I believe correction should come at this stage with market hovering around 11,900 level and this correction would be healthy for the market to sustain an upward trend.
Thanks and Good Luck with your investments.