KSE-100 Index: Indicators Maintain Sell Signal Despite Positive Closing; Indicators Topping Out In The Overbought Region

The Keystone for July 26, 2010

First support 10,234 points, second support 10,177 points; First resistance 10,363 points, second resistance 10,434 points

The index opened positive and remained strong throughout the day to close in the green. Volumes increased by 11.90% and stood at 67.39 mln. Average weekly volumes marginally declined by 1.63% and stood at 79 mln, while the index gained 111 points. The index on the daily chart managed to sustain above its critical resistance of 10,260 points. On the weekly chart, though, it has started to stall.

The Stochastic Oscillator on the daily chart maintains its sell signal, which makes Friday's formation a bearish divergence. Moreover on the weekly chart the Stochastic Oscillator on the weekly chart has started to stall in the overbought region. The RSI on the daily chart is gradually approaching the overbought region.

The above factors suggest that the index's uptrend is nearing completion. Hence any upside should be capitalized upon to sell.

The first support is at 10,234 points and the second support is at 10,177 points. The first resistance is at 10,363 points and the second resistance is at 10,434 points.