There are three major stock exchanges in Pakistan - the Karachi Stock Exchange, Lahore Stock Exchange, and Islamabad Stock Exchange. Over 500 companies are listed with a total capitalization of over $83 billion. Key stock market indices that track price movements include the KSE-100, KSE-30, and KMI-30. Analysis of securities can be done through fundamental analysis (which looks at financial ratios and qualitative factors) or technical analysis (which studies price trends and patterns on charts). Common patterns studied in technical analysis include head and shoulders patterns, double tops/bottoms, and breakouts of resistance/support levels.

2. Stock Exchange:
A MARKET IN WHICH SECURITIES ARE BOUGHT AND SOLD.
PAKISTAN STOCK EXCHANGE
THERE ARE THREE STOCK EXCHANGE MARKET IN PAKISTAN
1. KARACHI STOCK EXCHANGE
2. LAHORE STOCK EXCHANGE
3. ISLAMABAD STOCK EXCHANGE
LISTED COMPANIES IN PAKISTAN AND CAPITALIZATION
583 COMPANIES LISTED
8338.780 BILLION

3. Indices:
 are used to reflect movement of stock price
Reasons
Every stock price move two possible reasons
External effects
Internal effects
Stock Market indices of Pakistan
 KSE-100 index
 KSE-30 index
 KMI-30 index

4. Bull Market:
its raising market with abundance of buyer and few relatively few sellers.
Bear Market
A bear market is a week or falling market characterized by the dominance of sellers.
Market capitalization
Market value of a company’s outstanding share.

5. Securities Analysis:
The entire process of estimate return and risk for individual securities.
Classification
 Fundamental analysis
 Technical analysis
Kinds of fundamental analysis
 Quantitative analysis
 Qualitative analysis

6. Quantitative analysis:
The Qualitative Factors Are Those Which Can Obtain From Financial Statement.
RATIO ANALYSIS
 PROFITABLE RATIO
 LIQUIDITY RATIO
 SOLVENCY RATIO
 ACTIVITY RATIO
 MARKET RATIO

7. Trend
The trend can define as the direction in which the market moving
Up Trend Down Trend Sideway Trend

8. Qualitative analysis:
The qualitative factors relating to specific industry, competitiveness, quality management,
corporate governance etc.
 MACRO ECONOMIC ANALYSIS
 INDUSTRY ANALYSIS
 OTHER ASPECT OF FUNDAMENTAL ANALYSIS

9. Technical analysis:
The price od stock depend on demand and supply in the market place. The charts are drawn to
identified the price movement pattern to predict future movement of stock.
Theories of technical analysis
1. Dow theory
2. Advance decline theory
3. Short interest theory
4. Credit balance theory

10. Dow theory:
The dow theory advocates the stock price behave 90% psychological 10% logical. It’s the mood of
crowed which determines the direction in which the price move and move Can be gauged by
analyzing the price movement and value of transaction.
Advance decline theory
A market-breadth indicator used in technical analysis to compare the number of stocks that closed
higher with the number stock that closed lower than their pervious day’s closing price.

11. Short interest theory:
The theory that a large interest position in stock positions in stocks will precede a rise in the market
price because the short position must be eventually be covered by purchase of stock.
Credit balance theory
A theory stating that large cash balance on investors brokerage accounts indicator high market
potential.

12. Chartism:
Pattern are used to predict the market movements.
There are three basic concept of chart analysis
A. Persistence of trend
B. Relationship of trend and volume
C. Resistance of support level

13. Break-out:
The price breaks above the level of resistance level is
broken

14. Resistance and Support Level:
Its is a price level at which stock or market rises and than falls
from repeatedly.
The price level at which a stock or market price falls out repeatedly.

15. Head and Shoulder Pattern:
That predicts a bullish-to-bearish trend reversal. The pattern believed to be one of the most
reliable trend reversal patterns.
This pattern is comprised of three component parts
1. After a long bullish trends, the price rise to peak and subsequently
declines to from a through.
2. The price rises again to form a second high substantially above the initial
peak and decline
3. The price rises the third time but the level of first peak.

16. Double top and Bottom Formation:
The double top occur as a uptrend is about to reverse itself.
In double bottom the second decline is supported by substantially to more volume indicate the
price about to rise.

17. Theories On Stock Market Behavior Fisher Black’s Noise Theory:
The market of price stock differ from intrinsic values due to the existence of noise. Noise implies
distorted, incorrect and incomplete information existing in inefficient markets
Random Walk Hypothesis
Under this theory its assumed that stock price can never be predicted because that are not a result
of any underlying factors but mere are statistical ups and downs

18. Efficient market Hypothesis:
Under this theory its assumed that information is known freely to all investors, spontaneously
transmitted to the market establish share price. The share price movements occur as a reaction of
new information learnt by investors.

19. Fair Game Concept:
EMH that ability of investors to pick winner and make excess returns using information so
efficient can be considered in term of the fair game concept.

20. Model of share price: