KSE-100 Index: Reaction From 200-DMA Results In Negative Closing Below Previous Double-Bottom

The Keystone for June 01, 2010

First support 9,259 points, second support 9,142 points; first resistance 9,390 points, second resistance 9,448 points

Analysis and Overview:

The index opened marginally negative and after touching its day's high, took to a steady downtrend to close well negative. Volumes declined by 36.07% and stood at 60.52 mln. The index reacted negatively from the 200-DMA and took to a downtrend to close below the previous double-bottom at 9,355 points. This is bearish and is suggestive of further downside.

The Stochastic Oscillator on the daily chart has once again generated a sell signal, while the RSI on the daily chart too has shown weakness. Moreover the MACD maintains its downtrend as well as its sell signal on the daily and weekly chart. Also the 30-DMA has cut the 50-DMA from above with the former likely to cut the 100-DMA from above.

The first support is at 9,259 points and the second support is at 9,142 points. The first resistance is at 9,390 points and the second resistance is at 9,448 points.