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.