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.