The Keystone for June 17, 2010
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
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