KSE-100 Index: Closing Below Former Double-Top And 100-DMA A Bearish Signal

The Keystone for May 24, 2010

First support 9,809 points, second support 9,716 points; first resistance 9,901 points, second resistance 9,960 points

The index opened on a negative note and remained under pressure throughout the session to close in the red. Volumes increased by 12.70% and stood at 74.73 mln. The index registered a lower high and a lower low, while giving a sustained closing below the 100-DMA. Moreover it closed below its former double-top at 9,978 points. this was the level from where the index had staged a strong rally towards 10,736 points. This further adds credence to the bearish view.

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 on the daily chart has once again started to show weakness, while on the weekly chart it has broken below its support trendline Also, the MACD maintains its downtrend as well as its sell signal on the daily and weekly chart.

The first support is at 9,809 points and the second support is at 9,716 points. The first resistance is at 9,901 points and the second resistance is at 9,960 points.