KSE-100 Index: Closing Above 30-DMA And 200-DMA; Critical Resistance At 9,865 Points

The Keystone for July 08, 2010

First support 9,746 points, second support 9,659 points; First resistance 9,854 points, second resistance 9,941 points

Analysis and Overview:

The index opened flat and after momentarily dipping in the red, took to a steady uptrend to close well positive. Volumes continued to show improvement and stood at 50.55 mln. The index took support from the 30-DMA and managed to close above the 200-DMA. This suggests that the recovery is likely to continue with critical resistance placed at 9,865 points.

The Stochastic Oscillator on the daily chart has reversed and has now generated a buy signal, while the RSI on the daily chart too has shown improvement. However trend forecasting indicators maintain their bearish stance for the index.

With the index closing managing to close above its key moving averages, the recovery could continue. The test is to see if the index sustains above the 200-DMA while facing critical resistance at 9,865 points.

The first support is at 9,746 points and the second support is at 9,659 points. The first resistance is at 9,854 points and the second resistance is at 9,941 points.