KSE-100 Index: Indicators Gradually Approaching The Overbought Region

The Keystone for July 21, 2010

First support 10,181 points, second support 10,094 points; First resistance 10,320 points, second resistance 10,389 points

Analysis and Overview:

The index opened positive and after touching its day's high remained range-bound throughout the day to close in the green. Volumes increased by 19.15% and stood at 80.78 mln. The index is facing strong resistance at 10,260 points and despite breaching it intraday, failed to sustain itself only to close just below it. Moreover the uptrend seems to be losing momentum.

The Stochastic Oscillator on the daily chart has reversed and has generated a buy signal, thus leaving the cycle incomplete. Moreover any further rise would render it overbought once again. Moreover the RSI is also gradually approaching its overbought region.

Taking the above factors into consideration, any upside should be capitalized upon to sell.

The first support is at 10,181 points and the second support is at 10,094 points. The first resistance is at 10,320 points and the second resistance is at 10,389 points