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.