KSE-100 Index: Formation An Adjustment To Monday's Formation; Sell Signals Intact

The Keystone for July 01, 2010

First support 9,868 points, second support 9,793 points; First resistance 9,651 points, second resistance 9,578 points

Analysis and Overview:

The index opened positive and after touching its day's low, took to an uptrend to close below the high and marginally above the open. Volumes increased by 13.43% and stood at 71.29 mln. The index's formation serves as an adjustment to Monday's decline. The trend remains bearish. Moreover the stalling behavior of the index is a cause of concern as back-testing of data suggests that levels usually fail and the index breaks below the 200-DMA.

The Stochastic Oscillator on the daily chart maintains its sell signal, which makes the formation a bearish divergence. Moreover the RSI on the daily chart has started to stall as well. Also, trend forecasting indicators have now turned bearish on the index.

Since the past two trading sessions, the index has been witnessing an adjustment phase to Monday's bearish formation. Moreover it has been repeatedly breaching the 200-DMA on an intraday basis. This is bearish and any upside should be taken advantage of to sell.

The first support is at 9,868 points and the second support is at 9,793 points. The first resistance is at 9,651 points and the second resistance is at 9,578 points.

KSE-100 Index: Formation An Adjustment To Monday's Decline Indicators Maintain Sell Signals

The Keystone for June 30, 2010

First support 9,633 points, second support 9,543 points; First resistance 9,763 points, second resistance 9,843 points

The index opened positive and after touching its day's low, took to an uptrend to close below the high which it set in the initial hours of the day. Volumes were lower by 22.85% and stood at 62.85 mln. The index's formation was more of an adjustment to Monday's decline. The trend remains bearish.

The Stochastic Oscillator on the daily chart maintains its sell signal, while the RSI on the daily chart continues to show weakness after reacting from its resistance trendline. Moreover, the 30-DMA has cut the 200-DMA from above, while the 50-DMA has cut the 100-DMA from above. This is a bearish signal.

Hence Tuesday's formation is a bearish divergence and serves as an adjustment to the overall downtrend and any upside should be capitalized upon to sell.

The first support is at 9,633 points and the second support is at 9,543 points. The first resistance is at 9,763 points and the second resistance is at 9,843 points.

KSE-100 Index: Reaction From Resistance Level And Closing Below 200-DMA Suggests Resumption Of Downtrend

The Keystone for June 29, 2010

First support 9,608 points, second support 9,531 points; First resistance 9,734 points, second resistance 9,812 points

Analysis and Overview:

The index opened on a negative note and after touching its day's high, took to a downtrend to close well in the red. Volumes were marginally lower by 8.63% and stood at 81.46 mln. The index reacted negatively from its critical resistance of 9,860 points and took to a sharp downtrend to close at its day's low and below its 200-DMA as well as its resistance trendline (purple line). This is bearish and confirms the view of a top and the start of a corrective trend.

The Stochastic Oscillator on the daily chart has once again generated a sell signal after becoming overbought, while the RSI on the daily chart has started to show weakness after reacting from its resistance trendline. Moreover, the 30-DMA has cut the 200-DMA from above, while the 50-DMA has cut the 100-DMA from above. This is a bearish signal.

In light of the above, it would be prudent to capitalize upon any upside and sell on strength.

The first support is at 9,608 points and the second support is at 9,531 points. The first resistance is at 9,734 points and the second resistance is at 9,812 points

KSE-100 Index: Reaction From Resistance Level And Closing Below 200-DMA Suggests Resumption Of Downtrend

The Keystone for June 29, 2010

First support 9,608 points, second support 9,531 points; First resistance 9,734 points, second resistance 9,812 points

Analysis and Overview:

The index opened on a negative note and after touching its day's high, took to a downtrend to close well in the red. Volumes were marginally lower by 8.63% and stood at 81.46 mln. The index reacted negatively from its critical resistance of 9,860 points and took to a sharp downtrend to close at its day's low and below its 200-DMA as well as its resistance trendline (purple line). This is bearish and confirms the view of a top and the start of a corrective trend.

The Stochastic Oscillator on the daily chart has once again generated a sell signal after becoming overbought, while the RSI on the daily chart has started to show weakness after reacting from its resistance trendline. Moreover, the 30-DMA has cut the 200-DMA from above, while the 50-DMA has cut the 100-DMA from above. This is a bearish signal.

In light of the above, it would be prudent to capitalize upon any upside and sell on strength.

The first support is at 9,608 points and the second support is at 9,531 points. The first resistance is at 9,734 points and the second resistance is at 9,812 points.

KSE-100 Index: Stalling Around Recent Peak; Formation And Indicators Suggests Uptrend Nearing Completion

The Keystone for June 28, 2010

First support 9,727 points, second support 9,664 points; First resistance 9,848 points, second resistance 9,915 points

The index opened positive and after touching its day's high, took to a steady downtrend however after bottoming out around its day's low, it recovered to close marginally in the green. Volumes increased by 9.20% and stood at 89.16 mln. Average weekly volumes declined by 28.41% and stood at 78 mln, while the index gained 151 points. The index on the daily chart is stalling around its recent peak while its formation suggests that the uptrend is nearing completion.

The Stochastic Oscillator on the daily chart is almost overbought, while on the weekly chart is gradually approaching the overbought region. The RSI on the daily chart has started to stall, while on the weekly chart has shown marginal improvement. Moreover the 30-DMA has cut the 200-DMA from above. This is bearish.

The first support is at 9,727 points and the second support is at 9,664 points. The first resistance is at 9,848 points and the second resistance is at 9,915 points

KSE-100 Index: Breakout Likely Not To Be Sustainable; Moving Average Crossover A Bearish Signal

The Keystone for June 25, 2010

First support 9,731 points, second support 9,650 points; First resistance 9,863 points, second resistance 9,951 points

Analysis and Overview:

The index opened on a positive note and remained range-bound around its day's high to close in the green. Volumes increased by 28.85% and stood at 81.65 mln. Although the index managed to sustain above its resistance trendline (purple line) the question remains of its sustainability. This was the case on 5th - 7th May when the index gave a breakout on the 5th May, stayed above it on the 6th May and resumed its downtrend from the 7th May.

The Stochastic Oscillator on the daily chart has once again become overbought, while the RSI on the daily chart has started to stall around its resistance level as well. Moreover, the 30-DMA has cut the 200-DMA from above, while the 50-DMA has cut the 100-DMA from above. This is a bearish signal.

It would be prudent to capitalize upon any upside to sell on strength.

The first support is at 9,731 points and the second support is at 9,650 points. The first resistance is at 9,863 points and the second resistance is at 9,951 points

KSE-100 Index: Breakout Likely Not To Be Sustainable; Moving Average Crossover A Bearish Signal

The Keystone for June 25, 2010

First support 9,731 points, second support 9,650 points; First resistance 9,863 points, second resistance 9,951 points

Analysis and Overview:

The index opened on a positive note and remained range-bound around its day's high to close in the green. Volumes increased by 28.85% and stood at 81.65 mln. Although the index managed to sustain above its resistance trendline (purple line) the question remains of its sustainability. This was the case on 5th - 7th May when the index gave a breakout on the 5th May, stayed above it on the 6th May and resumed its downtrend from the 7th May.

The Stochastic Oscillator on the daily chart has once again become overbought, while the RSI on the daily chart has started to stall around its resistance level as well. Moreover, the 30-DMA has cut the 200-DMA from above, while the 50-DMA has cut the 100-DMA from above. This is a bearish signal.

It would be prudent to capitalize upon any upside to sell on strength.

The first support is at 9,731 points and the second support is at 9,650 points. The first resistance is at 9,863 points and the second resistance is at 9,951 points

KSE-100 Index: Formation Suggests Index Stalling Around 200-DMA; 30-DMA On The Verge Of Cutting 200-DMA

The Keystone for June 24, 2010

First support 9,675 points, second support 9,605 points; First resistance 9,761 points, second resistance 9,815 points

Analysis and Overview:

The index opened on a positive note and remained range-bound around its day's high to close in the green. Volumes declined by 29.10% and stood at 63.37 mln. The index traded around its resistance trendline (purple line) throughout the day. Even if it gives a breakout above it, it is not likely to be sustainable, as was the case on 5th and 6th May when the index gave a breakout on the 5th, stayed above it on the 6th and resumed its downtrend from the 7th May. Additionally, its formation is a "Spinning Top", which is indicative of a top especially considering the fact that it was created around its recent high.

The Stochastic Oscillator on the daily chart has now generated a sell signal thus making the formation a bearish divergence, while the RSI on the daily chart has started to stall around its resistance level as well. Moreover, the 30-DMA has just about cut the 200-DMA from above, which is a bearish signal.

The first support is at 9,675 points and the second support is at 9,605 points. The first resistance is at 9,761 points and the second resistance is at 9,815 points.

KSE-100 Index: Formation Suggests Index Stalling Around 200-DMA; 30-DMA On The Verge Of Cutting 200-DMA

The Keystone for June 24, 2010

First support 9,675 points, second support 9,605 points; First resistance 9,761 points, second resistance 9,815 points

Analysis and Overview:

The index opened on a positive note and remained range-bound around its day's high to close in the green. Volumes declined by 29.10% and stood at 63.37 mln. The index traded around its resistance trendline (purple line) throughout the day. Even if it gives a breakout above it, it is not likely to be sustainable, as was the case on 5th and 6th May when the index gave a breakout on the 5th, stayed above it on the 6th and resumed its downtrend from the 7th May. Additionally, its formation is a "Spinning Top", which is indicative of a top especially considering the fact that it was created around its recent high.

The Stochastic Oscillator on the daily chart has now generated a sell signal thus making the formation a bearish divergence, while the RSI on the daily chart has started to stall around its resistance level as well. Moreover, the 30-DMA has just about cut the 200-DMA from above, which is a bearish signal.

The first support is at 9,675 points and the second support is at 9,605 points. The first resistance is at 9,761 points and the second resistance is at 9,815 points.

KSE-100 Index: Reaction From Resistance Trendline And 30-DMA Results In Bearish Formation

The Keystone for June 23, 2010

First support 9,616 points, second support 9,511 points; First resistance 9,739 points, second resistance 9,815 points

Analysis and Overview:

The index opened on a positive note however after touching its day's high, took to a downtrend to close marginally above the open. Volumes improved by 33.36% and stood at 89.38 mln. The index reacted from its resistance trendline as well as 30-DMA in the process creating a "Shooting Star" formation which is bearish and is indicative of a top. Moreover this formation was created with higher volumes, which could be classified as a distribution when compared to the previous candlestick, which in itself is a spinning top. Additionally, back-testing of data suggests that such a range-bound movement around the 200-DMA usually is a precursor to a downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has started to stall around its resistance level. Moreover, the 30-DMA maintains its downtrend and is on the verge of cutting the 200-DMA from above which would be bearish.

The first support is at 9,616 points and the second support is at 9,511 points. The first resistance is at 9,739 points and the second resistance is at 9,815 points.

KSE-100 Index: Reaction From Resistance Trendline And 30-DMA Results In Bearish Formation

The Keystone for June 23, 2010

First support 9,616 points, second support 9,511 points; First resistance 9,739 points, second resistance 9,815 points

Analysis and Overview:

The index opened on a positive note however after touching its day's high, took to a downtrend to close marginally above the open. Volumes improved by 33.36% and stood at 89.38 mln. The index reacted from its resistance trendline as well as 30-DMA in the process creating a "Shooting Star" formation which is bearish and is indicative of a top. Moreover this formation was created with higher volumes, which could be classified as a distribution when compared to the previous candlestick, which in itself is a spinning top. Additionally, back-testing of data suggests that such a range-bound movement around the 200-DMA usually is a precursor to a downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has started to stall around its resistance level. Moreover, the 30-DMA maintains its downtrend and is on the verge of cutting the 200-DMA from above which would be bearish.

The first support is at 9,616 points and the second support is at 9,511 points. The first resistance is at 9,739 points and the second resistance is at 9,815 points.

KSE-100 Index: Reaction From Resistance Trendline And 30-DMA Results In Bearish Formation

The Keystone for June 23, 2010

First support 9,616 points, second support 9,511 points; First resistance 9,739 points, second resistance 9,815 points

Analysis and Overview:

The index opened on a positive note however after touching its day's high, took to a downtrend to close marginally above the open. Volumes improved by 33.36% and stood at 89.38 mln. The index reacted from its resistance trendline as well as 30-DMA in the process creating a "Shooting Star" formation which is bearish and is indicative of a top. Moreover this formation was created with higher volumes, which could be classified as a distribution when compared to the previous candlestick, which in itself is a spinning top. Additionally, back-testing of data suggests that such a range-bound movement around the 200-DMA usually is a precursor to a downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has started to stall around its resistance level. Moreover, the 30-DMA maintains its downtrend and is on the verge of cutting the 200-DMA from above which would be bearish.

The first support is at 9,616 points and the second support is at 9,511 points. The first resistance is at 9,739 points and the second resistance is at 9,815 points.

KSE-100 Index: Closing Below 200-DMA Suggests Trend Reversing; Momentum Indicators Overbought

The index opened flat and remained range-bound throughout the day to close marginally positive. Volumes declined by 50.47% and stood at 67.02 mln. The index has created a spinning top to close just below the 200-DMA. This suggests that the recent recovery phase is nearing completion and the index is likely to resume its downtrend.

The Stochastic Oscillator on the daily chart has now entered the overbought region, while the RSI on the daily chart has started to stall around its resistance level. Moreover, the 30-DMA maintains its downtrend and is on the verge of cutting the 200-DMA from above which would be bearish.

In summation, after forming a double top on the weekly chart the index has been witnessing pressure and is now hovering below the 200-DMA. This is bearish and suggests that the recent recovery phase is now complete.

The first support is at 9,608 points and the second support is at 9,557 points. The first resistance is at 9,711 points and the second resistance is at 9,774 points.

KSE-100 Index: Closing Below 200-DMA Suggests Trend Reversing; Momentum Indicators Overbought

The Keystone for June 22, 2010

First support 9,608 points, second support 9,557 points; First resistance 9,711 points, second resistance 9,774 points

Analysis and Overview:

The index opened flat and remained range-bound throughout the day to close marginally positive. Volumes declined by 50.47% and stood at 67.02 mln. The index has created a spinning top to close just below the 200-DMA. This suggests that the recent recovery phase is nearing completion and the index is likely to resume its downtrend.

The Stochastic Oscillator on the daily chart has now entered the overbought region, while the RSI on the daily chart has started to stall around its resistance level. Moreover, the 30-DMA maintains its downtrend and is on the verge of cutting the 200-DMA from above which would be bearish.

In summation, after forming a double top on the weekly chart the index has been witnessing pressure and is now hovering below the 200-DMA. This is bearish and suggests that the recent recovery phase is now complete.

The first support is at 9,608 points and the second support is at 9,557 points. The first resistance is at 9,711 points and the second resistance is at 9,774 points.

KSE-100 Index: Double Top And Bearish Formation Suggests Recovery Phase Nearing Completion

The Keystone for June 21, 2010

First support 9,580 points, second support 9,482 points; First resistance 9,691 points, second resistance 9,771 points

The index opened positive and after touching its day's high, took to a sharp downtrend to close in the red. Volumes were marginally lower by 2.25% and stood at 135.31 mln. Average weekly volumes declined by 7.21% and stood at 109 mln, while the index gained 174 points. The index's formation on the daily chart is a "Shooting Star" formation which suggests that the recovery phase of the index is nearing completion. Moreover the index has also created a double top at 9,820 points and closed in the red. This makes 9,820 points a formidable resistance level.

The Stochastic Oscillator on the daily chart is almost overbought, while on the weekly chart has given a weak buy signal. The RSI on the daily chart has started to stall, while on the weekly chart has shown marginal improvement, however has yet to generate a buy signal. Moreover the index failed to sustain above the 30-DMA, which is in a downtrend and in the near term is likely to cut the 200-DMA from above. This is bearish and suggests that the index's recovery phase is nearing completion while the overall trend remains bearish.

The first support is at 9,580 points and the second support is at 9,482 points. The first resistance is at 9,691 points and the second resistance is at 9,771 points.

KSE-100 Index: Double Top And Bearish Formation Suggests Recovery Phase Nearing Completion

The Keystone for June 21, 2010

First support 9,580 points, second support 9,482 points; First resistance 9,691 points, second resistance 9,771 points

The index opened positive and after touching its day's high, took to a sharp downtrend to close in the red. Volumes were marginally lower by 2.25% and stood at 135.31 mln. Average weekly volumes declined by 7.21% and stood at 109 mln, while the index gained 174 points. The index's formation on the daily chart is a "Shooting Star" formation which suggests that the recovery phase of the index is nearing completion. Moreover the index has also created a double top at 9,820 points and closed in the red. This makes 9,820 points a formidable resistance level.

The Stochastic Oscillator on the daily chart is almost overbought, while on the weekly chart has given a weak buy signal. The RSI on the daily chart has started to stall, while on the weekly chart has shown marginal improvement, however has yet to generate a buy signal. Moreover the index failed to sustain above the 30-DMA, which is in a downtrend and in the near term is likely to cut the 200-DMA from above. This is bearish and suggests that the index's recovery phase is nearing completion while the overall trend remains bearish.

The first support is at 9,580 points and the second support is at 9,482 points. The first resistance is at 9,691 points and the second resistance is at 9,771 points.

KSE-100 Index: Closing Above 200-DMA And Resistance Trendline Suggests Uptrend To Continue

The Keystone for June 18, 2010

First support 9,617 points, second support 9,514 points; First resistance 9,767 points, second resistance 9,860 points

Analysis and Overview:

The index opened on a negative note and after touching its day's low, took to a strong uptrend to close well positive. Volumes increased by 39.32% and stood at 138.42 mln. The index managed to close above the 200-DMA as well as its resistance trendline (purple line), which suggests that the uptrend is to continue. The test is to see whether the index sustains above the 200-DMA and its recent double-top at 9,826 points.

The Stochastic Oscillator on the daily chart maintains its uptrend however is approaching now rapidly approaching the overbought region, while the RSI on the daily chart has also shown improvement. On the other hand, the 30-DMA maintains its downtrend and in the near-term could cut the 200-DMA from above which would be bearish.

The first support is at 9,617 points and the second support is at 9,514 points. The first resistance is at 9,767 points and the second resistance is at 9,860 points

KSE-100 Index: Short-Term Recovery To Continue; Resistance Trendline And 200-DMA To Clip Gains

The Keystone for June 17, 2010

First support 9,378 points, second support 9,274 points; First resistance 9,512 points, second resistance 9,610 points

Analysis and Overview:

The index opened positive and remaining range-bound through the first half of the session, took to a strong uptrend to close well positive. Volumes increased by 19.77% and stood at 99.35 mln. The index's formation suggests that the recovery phase is likely to continue, however the resistance trendline (purple line) as well as the 200-DMA is likely to clip gains.

The Stochastic Oscillator on the daily chart has shown modest improvement, while the RSI on the daily chart has also shown improvement. On the other hand, the MACD maintains its sell signal. Moreover the 30-DMA maintains its downtrend and in the near-term could cut the 200-DMA from above thus adding strength to the bearish view.

The index could continue on its recovery phase but as highlighted above, the 200-DMA as well as the resistance trendline could create resistance. Moreover the MACD on the weekly chart and the Stochastic Oscillator on the monthly chart maintain their sell signals. This suggests that the overall bearish trend is intact.

The first support is at 9,378 points and the second support is at 9,274 points. The first resistance is at 9,512 points and the second resistance is at 9,610 points

KSE-100 Index: Formation As A Result Of Gap-Filling; Overall Trend Bearish

The Keystone for June 16, 2010

First support 9,187 points, second support 9,102 points; First resistance 9,324 points, second resistance 9,399 points

Analysis and Overview:

The index opened positive and after touching its day's high, took to a corrective trend to dip in the red only to recover to close in the green. Volumes declined by 7.34% and stood at 82.95 mln. The index's formation was more to do with gap-filling which was created on Monday. This is further evidenced by the relatively lower volumes. The adjustment could continue, however, the trend remains bearish.

The Stochastic Oscillator on the daily chart has shown modest improvement however maintains its sell signal, while the RSI on the daily chart is in a downtrend. Also, the MACD has confirmed its sell signal. Moreover the 30-DMA maintains its downtrend and in the near-term could cut the 200-DMA from above thus adding strength to the bearish view.

The trend remains bearish and the index is likely to test 8,684 points.

The first support is at 9,187 points and the second support is at 9,102 points. The first resistance is at 9,324 points and the second resistance is at 9,399 points

KSE-100 Index: Lowest Closing And New Intraday Low Suggests Further Downside

The Keystone for June 15, 2010

First support 9,159 points, second support 9,057 points; First resistance 9,279 points, second resistance 9,353 points

Analysis and Overview:

The index opened substantially negative, however showed some recovery from around its day's low only to close well in the red. Volumes increased by 31.93% and stood at 89.53 mln. The index registered a new intraday low as well as closed at a new low, thus suggesting that the decline came in with volumes. This confirms the view that the trend is bearish.

The Stochastic Oscillator on the daily chart maintains its sell signal, while the RSI on the daily chart is in a downtrend. Also, the MACD has once again reversed and has once again generated a sell signal. Moreover the 30-DMA maintains its downtrend and in the near-term could cut the 200-DMA from above thus adding strength to the bearish view.

Since index closed at a new low while also registering a new intraday low, it could likely test 8,684 points. Critical resistance stands at 9,628 points being the 200-DMA. Moreover most of the key stock are trading below critical moving averages and continue to show weakness.

The first support is at 9,159 points and the second support is at 9,057 points. The first resistance is at 9,279 points and the second resistance is at 9,353 points.

KSE-100 Index: Formation An Adjustment To Thursday's Sharp Decline; Trend Remains Bearish

The Keystone for June 14, 2010

First support 9,425 points, second support 9,351 points; First resistance 9,528 points, second resistance 9,592 points

The index opened flat and remained strong throughout the day to close in the green. Volumes declined by 32.63% and stood at 67.86 mln. Average weekly volumes were up by 15.57% from 101 mln to 117 mln, while the index declined by 156 points. The index's formation serves as an adjustment to Thursday's sharp decline. The overall trend remains bearish.

The Stochastic Oscillator on the daily chart maintains its sell signal, while the RSI on the daily chart is generally in a downtrend. This makes Friday's formation a bearish divergence. Moreover the 30-DMA maintains its downtrend and in the near-term could cut the 200-DMA from above thus adding strength to the bearish view.

Since index has closed below the 200-DMA, it could likely test 8,684 points. Minor support is placed at 9,164 points. Critical resistance stands at 9,628 points being the 200-DMA. Moreover most of the index drivers are trading below critical moving averages and continue to show weakness.

The first support is at 9,425 points and the second support is at 9,351 points. The first resistance is at 9,528 points and the second resistance is at 9,592 points.

The Keystone: KSE-100 Index: Closing Below 200-DMA By A Wide Margin Suggests Further Downside Risk

The Keystone for June 11, 2010

First support 9,307 points, second support 9,188 points; First resistance 9,435 points, second resistance 9,484 points

Analysis and Overview:

The index opened marginally negative and after touching its day's high, took to a downtrend, to close well into the red and around its day's low. Volumes declined by 17.64% and stood at 100 mln. The index reacted from its resistance trendline in the process closing below the 200-DMA. This is bearish and is suggestive of further downside risk.

The Stochastic Oscillator on the daily chart maintains its sell signal, while the RSI on the daily chart has shown weakness. The 30-DMA has cut the 100-DMA from above, which has started to conform to a downtrend as well thus adding strength to the bearish view.

Since index has closed below the 200-DMA, it could likely test 8,684 points which was from where it started its rally towards 10,721 points. Minor support is placed at 9,164 points. Critical resistance stands at 9,620 points being the 200-DMA.

The first support is at 9,307 points and the second support is at 9,188 points. The first resistance is at 9,435 points and the second resistance is at 9,484 points.

KSE-100 Index: Formation And Indicators Suggest Resumption Of Downtrend

The Keystone for June 10, 2010

First support 9,603 points, second support 9,520 points; First resistance 9,738 points, second resistance 9,805 points

Analysis and Overview:

The index opened mildly positive and after touching its day's high, took to a downtrend. However after staging a minor recovery and momentarily breaking even, resumed its downtrend to close in the red and around its day's low. Volumes declined by 10.26% and stood at 122 mln. The index registered a lower high and a lower low, while closing below its resistance trendline. This is indicative of the resumption of the downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has shown weakness. The 30-DMA has cut the 100-DMA which has also started to conform to a downtrend as well which is a bearish signal.

This suggests that the index is likely to resume its downtrend. The test is to see if the index holds above the 200-DMA (currently at 9,606 points). If the index closes below the 200-DMA, it could likely test 8,684 points which was from where it started its rally towards 10,721 points.

The first support is at 9,603 points and the second support is at 9,520 points. The first resistance is at 9,738 points and the second resistance is at 9,805 points.

KSE-100 Index: Formation And Indicators Suggest Resumption Of Downtrend

The Keystone for June 10, 2010

First support 9,603 points, second support 9,520 points; First resistance 9,738 points, second resistance 9,805 points

Analysis and Overview:

The index opened mildly positive and after touching its day's high, took to a downtrend. However after staging a minor recovery and momentarily breaking even, resumed its downtrend to close in the red and around its day's low. Volumes declined by 10.26% and stood at 122 mln. The index registered a lower high and a lower low, while closing below its resistance trendline. This is indicative of the resumption of the downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has shown weakness. The 30-DMA has cut the 100-DMA which has also started to conform to a downtrend as well which is a bearish signal.

This suggests that the index is likely to resume its downtrend. The test is to see if the index holds above the 200-DMA (currently at 9,606 points). If the index closes below the 200-DMA, it could likely test 8,684 points which was from where it started its rally towards 10,721 points.

The first support is at 9,603 points and the second support is at 9,520 points. The first resistance is at 9,738 points and the second resistance is at 9,805 points.

KSE-100 Index: Formation And Indicators Suggest Resumption Of Downtrend

The Keystone for June 10, 2010

First support 9,603 points, second support 9,520 points; First resistance 9,738 points, second resistance 9,805 points

Analysis and Overview:

The index opened mildly positive and after touching its day's high, took to a downtrend. However after staging a minor recovery and momentarily breaking even, resumed its downtrend to close in the red and around its day's low. Volumes declined by 10.26% and stood at 122 mln. The index registered a lower high and a lower low, while closing below its resistance trendline. This is indicative of the resumption of the downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has shown weakness. The 30-DMA has cut the 100-DMA which has also started to conform to a downtrend as well which is a bearish signal.

This suggests that the index is likely to resume its downtrend. The test is to see if the index holds above the 200-DMA (currently at 9,606 points). If the index closes below the 200-DMA, it could likely test 8,684 points which was from where it started its rally towards 10,721 points.

The first support is at 9,603 points and the second support is at 9,520 points. The first resistance is at 9,738 points and the second resistance is at 9,805 points.

KSE-100 Index: Formation And Indicators Suggest Resumption Of Downtrend

The Keystone for June 10, 2010

First support 9,603 points, second support 9,520 points; First resistance 9,738 points, second resistance 9,805 points

Analysis and Overview:

The index opened mildly positive and after touching its day's high, took to a downtrend. However after staging a minor recovery and momentarily breaking even, resumed its downtrend to close in the red and around its day's low. Volumes declined by 10.26% and stood at 122 mln. The index registered a lower high and a lower low, while closing below its resistance trendline. This is indicative of the resumption of the downtrend.

The Stochastic Oscillator on the daily chart has now generated a sell signal in the overbought region, while the RSI on the daily chart has shown weakness. The 30-DMA has cut the 100-DMA which has also started to conform to a downtrend as well which is a bearish signal.

This suggests that the index is likely to resume its downtrend. The test is to see if the index holds above the 200-DMA (currently at 9,606 points). If the index closes below the 200-DMA, it could likely test 8,684 points which was from where it started its rally towards 10,721 points.

The first support is at 9,603 points and the second support is at 9,520 points. The first resistance is at 9,738 points and the second resistance is at 9,805 points.

KSE-100 Index: Double Top Leads To Negative Closing; Recovery Phase Nearing Completion

The Keystone for June 09, 2010

First support 9,688 points, second support 9,595 points; First resistance 9,822 points, second resistance 9,894 points

Analysis and Overview:

The index opened positive and after touching its day's high in the initial hour, took to a downtrend to close in the red. Volumes declined by 15.25% and stood at 136.28 mln. The index has created a double-top and as a consequence closed in the red. This suggests that the index's recovery phase is nearing completion.

The 30-DMA has cut the 100-DMA from above with the 100-DMA also conforming to a downtrend as well. This is bearish. Moreover, the Stochastic Oscillator on the daily chart has stalled in the overbought region and is on the verge of generating a sell signal. Also the RSI on the daily chart has shown weakness.

Hence, the short-term recovery phase is nearing completion and any upside should be capitalized upon to sell.

The first support is at 9,688 points and the second support is at 9,595 points. The first resistance is at 9,822 points and the second resistance is at 9,894 points.

KSE-100 Index: Formation Suggests Recovery Phase Nearing Completion; Momentum Indicators Overbought On Daily Chart

The Keystone for June 07, 2010

First support 9,572 points, second support 9,496 points; First resistance 9,711 points, second resistance 9,787 points

The index opened positive and after touching its day's low, took to a strong uptrend, only to close below the open albeit in the green. Volumes declined by 30.15% and stood at 98.21 mln. Average weekly volumes were flat at 101 mln, while the index gained by 121 points. the index's formation on the daily chart is a "Hanging Man" formation which suggests that the recovery phase of the index is nearing completion.

The Stochastic Oscillator on the daily chart has become overbought, while on the weekly chart has leveled off. Moreover the Stochastic Oscillator on the monthly chart has generated a sell signal. The RSI on the daily chart has started to stall, while on the weekly chart has shown marginal improvement, however has yet to generate a buy signal. Moreover the MACD on the daily and weekly chart maintains its sell signal.

With critical resistances at 9,757 points and 9,865 points, upside seems capped.

The first support is at 9,572 points and the second support is at 9,496 points. The first resistance is at 9,711 points and the second resistance is at 9,787 points.

KSE-100 Index: Formation Suggests Recovery Phase Nearing Completion; Momentum Indicators Overbought On Daily Chart

The Keystone for June 07, 2010

First support 9,572 points, second support 9,496 points; First resistance 9,711 points, second resistance 9,787 points

The index opened positive and after touching its day's low, took to a strong uptrend, only to close below the open albeit in the green. Volumes declined by 30.15% and stood at 98.21 mln. Average weekly volumes were flat at 101 mln, while the index gained by 121 points. the index's formation on the daily chart is a "Hanging Man" formation which suggests that the recovery phase of the index is nearing completion.

The Stochastic Oscillator on the daily chart has become overbought, while on the weekly chart has leveled off. Moreover the Stochastic Oscillator on the monthly chart has generated a sell signal. The RSI on the daily chart has started to stall, while on the weekly chart has shown marginal improvement, however has yet to generate a buy signal. Moreover the MACD on the daily and weekly chart maintains its sell signal.

With critical resistances at 9,757 points and 9,865 points, upside seems capped.

The first support is at 9,572 points and the second support is at 9,496 points. The first resistance is at 9,711 points and the second resistance is at 9,787 points.

KSE-100 Index: Formation Suggests Short-Term Recovery Phase To Continue

The Keystone for June 04, 2010

First support 9,559 points, second support 9,493 points; First resistance 9,695 points, second resistance 9,765points

Analysis and Overview:

The index opened positive and after touching its day's low in the initial hour, reversed its trend and remained range-bound well into the positive territory. Volumes increased by 22.93% and stood at 140.61 mln. The index managed to sustain above the 20-DMA however the candlestick body was smaller compared to Tuesday's candlestick. This is a bit disconcerting considering the fact that volumes were higher.

The 30-DMA has cut the 50-DMA from above with the former likely to cut the 100-DMA from above. Incidentally the 100-DMA has started to conform to a downtrend as well. However, the Stochastic Oscillator on the daily chart maintains its buy signal but is now rapidly approaching the overbought region, while the RSI on the daily chart has shown improvement.

Hence the short-term follow-through is likely to continue for now.

The first support is at 9,559 points and the second support is at 9,493 points. The first resistance is at 9,695 points and the second resistance is at 9,765 points.

KSE-100 Index: Formation Suggests Short-Term Recovery Phase To Continue

The Keystone for June 04, 2010

First support 9,559 points, second support 9,493 points; First resistance 9,695 points, second resistance 9,765points

Analysis and Overview:

The index opened positive and after touching its day's low in the initial hour, reversed its trend and remained range-bound well into the positive territory. Volumes increased by 22.93% and stood at 140.61 mln. The index managed to sustain above the 20-DMA however the candlestick body was smaller compared to Tuesday's candlestick. This is a bit disconcerting considering the fact that volumes were higher.

The 30-DMA has cut the 50-DMA from above with the former likely to cut the 100-DMA from above. Incidentally the 100-DMA has started to conform to a downtrend as well. However, the Stochastic Oscillator on the daily chart maintains its buy signal but is now rapidly approaching the overbought region, while the RSI on the daily chart has shown improvement.

Hence the short-term follow-through is likely to continue for now.

The first support is at 9,559 points and the second support is at 9,493 points. The first resistance is at 9,695 points and the second resistance is at 9,765 points.

KSE-100 Index: Formation Suggests Short-Term Recovery Phase To Continue

The Keystone for June 04, 2010

First support 9,559 points, second support 9,493 points; First resistance 9,695 points, second resistance 9,765points

Analysis and Overview:

The index opened positive and after touching its day's low in the initial hour, reversed its trend and remained range-bound well into the positive territory. Volumes increased by 22.93% and stood at 140.61 mln. The index managed to sustain above the 20-DMA however the candlestick body was smaller compared to Tuesday's candlestick. This is a bit disconcerting considering the fact that volumes were higher.

The 30-DMA has cut the 50-DMA from above with the former likely to cut the 100-DMA from above. Incidentally the 100-DMA has started to conform to a downtrend as well. However, the Stochastic Oscillator on the daily chart maintains its buy signal but is now rapidly approaching the overbought region, while the RSI on the daily chart has shown improvement.

Hence the short-term follow-through is likely to continue for now.

The first support is at 9,559 points and the second support is at 9,493 points. The first resistance is at 9,695 points and the second resistance is at 9,765 points.

KSE-100 Index: Sustenance Above 200-DMA Pivotal For Further Upside

The Keystone for June 03, 2010

First support 9,431 points, second support 9,371 points; First resistance 9,588 points, second resistance 9,656 points

Analysis and Overview:

The index opened positive and after touching its day's low in the initial hour, reversed its trend to close well positive. Volumes increased by 20.34% and stood at 114.38 mln. The follow-through continued as a result of Monday's hammer, resulting in the index registering a higher high and a higher low.

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. However, the Stochastic Oscillator on the daily chart has generated a buy signal having cleared the oversold region, while the RSI on the daily chart has shown improvement as well having cleared its oversold region.

Hence the short-term follow-through is likely to continue for now. However, closing above the 200-DMA is pivotal for further upside.

The first support is at 9,431 points and the second support is at 9,371 points. The first resistance is at 9,588 points and the second resistance is at 9,656 points.

KSE-100 Index: Sustenance Above 200-DMA Pivotal For Further Upside

The Keystone for June 03, 2010

First support 9,431 points, second support 9,371 points; First resistance 9,588 points, second resistance 9,656 points

Analysis and Overview:

The index opened positive and after touching its day's low in the initial hour, reversed its trend to close well positive. Volumes increased by 20.34% and stood at 114.38 mln. The follow-through continued as a result of Monday's hammer, resulting in the index registering a higher high and a higher low.

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. However, the Stochastic Oscillator on the daily chart has generated a buy signal having cleared the oversold region, while the RSI on the daily chart has shown improvement as well having cleared its oversold region.

Hence the short-term follow-through is likely to continue for now. However, closing above the 200-DMA is pivotal for further upside.

The first support is at 9,431 points and the second support is at 9,371 points. The first resistance is at 9,588 points and the second resistance is at 9,656 points.

KSE-100 Index: Formation And Volume Suggests Short-Term Recovery; 200-DMA To Create Resistance

The Keystone for June 02, 2010

First support 9,231 points, second support 9,139 points; first resistance 9,366 points, second resistance 9,448 points

Analysis and Overview:

The index opened negative and continued well into the negative zone. It however posted a recovery and also turned positive momentarily but closed in the red. Volumes increased by 57.06% and stood at 95.05 mln. The index reacted from close to the August-December 2008 floor level of 9,187 points and recovered with improved volumes, creating a long lower shadow in the process. This suggests that a short-term recovery is possible however the 200-DMA is likely to create resistance.

The Stochastic Oscillator on the daily chart continues to fluctuate around the oversold region, while the RSI on the daily chart continues to show 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.

This confirms the view that a short-term pullback is possible, with the overall trend remaining bearish.

The first support is at 9,231 points and the second support is at 9,139 points. The first resistance is at 9,366 points and the second resistance is at 9,448 points.