KSE-100 Index: Closing Below 100-DMA Suggests Further Pressure; Indicators Remain Bearish

The Keystone for May 21, 2010

First support 9,919 points, second support 9,825 points; first resistance 10,050 points, second resistance 10,108 points

Analysis and Overview:

The index opened on a negative note, however after touching its day's high it took to a downtrend to close in the red. Volumes declined by 43.94% and stood at 66.31 mln. Although the index registered a higher low, it failed to sustain above the 100-DMA. This is bearish and suggests further downside risk. Moreover the overall trend remains bearish as the 30-DMA has taken to a downtrend and could cut the 50-DMA from above in the near term.

The Stochastic Oscillator on the daily chart maintains its sell signal, which coupled with the weekly and monthly Stochastic Oscillator maintaining sell signals is a bearish signal. Moreover the RSI has once again started to show weakness. Also, the MACD maintains its downtrend as well as its sell signal on the daily and weekly chart.

The first support is at 9,919 points and the second support is at 9,825 points. The first resistance is at 10,050 points and the second resistance is at 10,108 points.