KSE-100 Index: Inertial Momentum To Continue; Formation Suggests Index Nearing Peak

The Keystone for July 15, 2010

First support 10,131 points, second support 10,065 points; first resistance 10,238 points, second resistance 10,304 points

Analysis and Overview:

The index opened positive and after initially witnessing profit-taking, recovered to close in the green. Volumes increased by 78.55% and stood at 121.26 mln. The index's inertial momentum is leading to the index maintaining its uptrend however the formation created suggests that the index is nearing its peak.

The Stochastic Oscillator on the daily chart is on the verge of generating a sell signal in the overbought region, while the RSI is approaching the overbought region. Also the index has closed above the upper Bollinger Band which makes it increasingly prone to correction.

The first support is at 10,131 points and the second support is at 10,065 points. The first resistance is at 10,238 points and the second resistance is at 10,304 points.