KSE-100 Index: Closing below 200-DMA And 30-week MA A Bearish Sign; Sell Signal On Monthly Chart Generated

The Keystone for May 31, 2010

First support 9,451 points, second support 9,362 points; First resistance 9,569 points, second resistance 9,633 points

Analysis and Overview:

The index opened marginally positive and after touching its day's high, took to a downtrend, however after forming a double-bottom at its day's low, recovered to close in the green. Volumes declined by 8.85% and stood at 94.66 mln. Average weekly volumes were up by 22.53% from 83 mln to 102 mln, while the index declined by 350 points. This suggests that the decline came in with volumes, which is bearish. On the daily chart, the index closed below the 200-DMA, while on the weekly chart it closed below the 30-week moving average.

The Stochastic Oscillator on the daily chart maintains its uptrend, while on the weekly chart it maintains its sell signal. Moreover the Stochastic Oscillator on the monthly chart has generated a sell signal. The RSI on the daily chart has shown some improvement, while on the weekly and monthly chart maintains its downtrend as well as sell signal. Moreover the MACD on the daily and weekly chart maintains its sell signal.

The index could see a short-term pullback however, the overall trend remains bearish.

The first support is at 9,451 points and the second support is at 9,362 points. The first resistance is at 9,569 points and the second resistance is at 9,633 points.