KSE-100 Index: Strong Closing With Volumes Suggests Recovery Phase Likely To Continue In The Short-Term

The Keystone for September 01, 2010

First support 9,758 points, second support 9,645 points; First resistance 9,898 points, second resistance 9,976 points

The index opened positive and remained strong throughout the session to close well into the green. Volumes showed a marked improvement of 122.83% and stood at 81.65 mln ? the second highest volume in August. The index managed to register a higher low. However what remains to be seen is if the index manages to close and subsequently stay above the 200-DMA. While there is a short-term recovery underway, avoid chasing prices and sell on strength.

The Stochastic Oscillator has shown a strong move to the uptrend and has generated a buy signal in the process, while the RSI has also shown a decent improvement. On the flip side, the MACD maintains its sell signal, while the 30-DMA, 50-DMA and 100-DMA maintain their respective downtrends, with a strong possibility that the 30-DMA and 50-DMA are likely to cut the 100-DMA from above.

While the recovery phase could continue for a bit longer, it is advisable to sell on strength as 9,900 points plays a critical resistance benchmark for the index.

The first support is at 9,758 points and the second support is at 9,645 points. The first resistance is at 9,898 points and the second resistance is at 9,976 points.

KSE-100 Index: Formation Suggests Further Downside Risk As Index Closes At A New Low

The Keystone for August 31, 2010

First support 9,440 points, second support 9,354 points; First resistance 9,578 points, second resistance 9,639 points

The index opened marginally positive and after touching its day's high, took to a steady downtrend only to close in the red. Volumes increased marginally by 3.50% and stood at 36.64 mln. The index has formed an Engulfing Bearish formation while also registering a new low on closing basis. This is bearish and suggests further downside risk.

The Stochastic Oscillator on the daily chart has become oversold though in a failure swing. However the RSI has once again started to show weakness and the MACD maintains its sell signal. Also the 30-DMA, 50-DMA and 100-DMA maintain their respective downtrends, with the likelihood of a crossover building up with each passing day. This would further add credence to the bearish view.

The first support is at 9,440 points and the second support is at 9,354 points. The first resistance is at 9,578 points and the second resistance is at 9,639 points.

KSE-100 Index: Positive Closing With Low Volumes Suggests Index Undergoing Adjustment Phase

The Keystone for August 30, 2010

First support 9,523 points, second support 9,454 points; First resistance 9,657 points, second resistance 9,727 points

The index opened marginally positive and after initially setting its day's range it remained range-bound to close marginally in the green. Volumes sharply declined by 44.21% and stood at 35.40 mln. Average weekly volumes declined by 17.93% while the index lost 262 points. The index's formation serves as a breather and an adjustment. As it stands, the trend remains bearish as the 30-DMA and 100-DMA have taken to their respective downtrends and in the near term could cut the 30-DMA from above while the index continues to trade below them.

The Stochastic Oscillator on the daily chart has become oversold, while the RSI is neutral and the MACD maintains its sell signal. Also the Bollinger Bands have now conformed to a downtrend thus confirming the view that the trend has turned bearish. On the weekly charts as well, the index's indicators maintain their bearish stance.

The first support is at 9,523 points and the second support is at 9,454 points. The first resistance is at 9,657 points and the second resistance is at 9,727 points.

KSE-100 Index: Formation Serves As An Adjustment In The Overall Downtrend

The Keystone for August 27, 2010

First support 9,510 points, second support 9,421 points; First resistance 9,647 points, second resistance 9,689 points

Analysis and Overview:

The index opened marginally positive and after initially dipping in the red, took to a steady uptrend only to form a double-top, but managed to close in the green. Volumes increased by 37.99% and stood at 63.45 mln. The index’s formation serves as a breather and an adjustment as it had been closing in the red for the previous three sessions. As it stands, the trend remains bearish as the 30-DMA and 100-DMA have taken to their respective downtrends and in the near term could cut the 30-DMA from above.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal, while the RSI too maintains its weakness and the MACD maintains its sell signal. Also the Bollinger Bands have now conformed to a downtrend, thus confirming the view that the trend has turned bearish.

The first support is at 9,510 points and the second support is at 9,421 points. The first resistance is at 9,647 points and the second resistance is at 9,689 points

KSE-100 Index: Sustained Closing Below The 200-DMA Suggests Correction To Continue

The Keystone for August 26, 2010

First support 9,478 points, second support 9,365 points; First resistance 9,631 points, second resistance 9,731 points

The index opened flat and after touching its day's high, took to a steady downtrend to close in the red. Volumes increased by 15.86% and stood at 45.98 mln. The index gave a sustained closing below the 200-DMA which suggests that downward pressure is likely to prevail on the index for now and that the index is likely to register a lower highs and a lower lows in each swing.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal, while the RSI too has started to show weakness. Also the MACD maintains its sell signal. Also the Bollinger Bands have now conformed to a downtrend thus confirming the view that the trend has turned bearish. On the weekly chart the Stochastic Oscillator maintains its downtrend while generating a sell signal and now the MACD too has conformed to a downtrend having reissued a sell signal.

The first support is at 9,478 points and the second support is at 9,365 points. The first resistance is at 9,631 points and the second resistance is at 9,713 points.

KSE-100 Index: Closing below 200-DMA Suggests Further Downside; Indicators Generate Sell Signal

The Keystone for August 25, 2010

First support 9,586 points, second support 9,478 points; First resistance 9,712 points, second resistance 9,791 points

The index opened flat and after touching its day's high, took to a steady downtrend to close in the red. Volumes declined by 21.93% and stood at 39.69 mln. The index has broken below the 200-DMA which suggests that downward pressure is likely to prevail on the index for now and that the index is likely to register a lower highs and a lower lows in each swing.

The Stochastic Oscillator on the daily chart has now taken to a downtrend and has generated a sell signal, while the RSI too has started to show weakness. Also the MACD maintains its sell signal. On the weekly chart the Stochastic Oscillator maintains its downtrend while generating a sell signal and now the MACD too has conformed to a downtrend having reissued a sell signal.

The first support is at 9,586 points and the second support is at 9,478 points. The first resistance is at 9,712 points and the second resistance is at 9,791 points

KSE-100 Index: Formation Further Compounds Bearish View; Indicators Now Generate Sell Signal

The Keystone for August 24, 2010

KSE-100 Index: Formation Further Compounds Bearish View; Indicators Now Generate Sell Signal

First support 9,746 points, second support 9,675 points; First resistance 9,876 points, second resistance 9,949 points

Analysis and Overview:

The index opened positive, however after touching its day's high, took to a steady downtrend to close in the red. Volumes increased by 17.42% and stood at 50.83 mln. The index has created an Engulfing Bearish formation, which in an uptrend indicates a top and is all the more bearish considering the fact that Friday's formation was a "Hanging Man" formation. Moreover, the index has also formed a double top around 9,890 points, while also taking resistance from its downward channel's resistance trendline. This suggests that the index is likely to register a lower high and a lower low in each swing.

The Stochastic Oscillator on the daily chart has started to stall in the overbought region, while the RSI has started to show weakness. Also the MACD maintains its sell signal. On the weekly chart the Stochastic Oscillator maintains its downtrend while generating a sell signal and now the MACD too has conformed to a downtrend having reissued a sell signal.

The first support is at 9,746 points and the second support is at 9,675 points. The first resistance is at 9,876 points and the second resistance is at 9,949 points.

KSE-100 Index: Formation Suggests Uptrend Nearing Completion; Momentum Indicators Almost Overbought

The Keystone for August 23, 2010

First support 9,801 points, second support 9,730 points; First resistance 9,922 points, second resistance 9,984 points

The index opened flat and maintained a steady downtrend throughout the first half of the session. However after touching its day's low, it started to recover and closed off the session positive. Volumes declined by 22.57% and stood at 43.29 mln. The index's formation is a "Hanging Man" formation, which in an uptrend indicates a top. This suggests that the recovery phase is nearing completion. Critical resistance levels are 9,938 points being the 50-DMA and the 100-DMA which is presently at 10,047 points and declining.

The Stochastic Oscillator on the daily chart has become overbought, thus adding credence to the view that the recovery phase is nearing completion. The RSI has started to level off as well, while the MACD maintains its sell signal. On the weekly chart the Stochastic Oscillator maintains its downtrend while generating a sell signal and now the MACD too has conformed to a downtrend having reissued a sell signal.

The first support is at 9,801 points and the second support is at 9,730 points. The first resistance is at 9,922 points and the second resistance is at 9,984 points.

KSE-100 Index: Short-Term Recovery Possible As 200-DMA Tested; Indicators Oversold On Daily Chart

The Keystone for August 13, 2010

First support 9,749 points, second support 9,658 points; First resistance 9,862 points, second resistance 9,918 points

The index opened positive and after remaining range-bound through most of the day, took to a sharp downtrend to close well in the red and around the 200-DMA. Volumes declined by 58.57% and stood at 25.54 mln (1st day of Ramadan, hence shorter working hours). The fact that the index closed around the 200-DMA suggests that a short-term recovery is possible. Critical resistance is placed between 10,070 (100-DMA) and 10,173 points, while support is placed at 9,790 points being the 200-DMA.

The Stochastic Oscillator on the daily chart has now started to bottom out while being well oversold, thus suggesting the possibility of a short-term recovery. The RSI too is approaching the oversold region and could lead to a short-term recovery. However on the weekly chart the Stochastic Oscillator has assumed a downtrend and has generated a sell signal in the process. MACD have conformed to their respective downtrends and in the process have generated sell signals.

The first support is at 9,749 points and the second support is at 9,658 points. The first resistance is at 9,862 points and the second resistance is at 9,918 points

KSE-100 Index: Short-Term Recovery Possible As 200-DMA Tested; Indicators Oversold On Daily Chart

The Keystone for August 13, 2010

First support 9,749 points, second support 9,658 points; First resistance 9,862 points, second resistance 9,918 points

The index opened positive and after remaining range-bound through most of the day, took to a sharp downtrend to close well in the red and around the 200-DMA. Volumes declined by 58.57% and stood at 25.54 mln (1st day of Ramadan, hence shorter working hours). The fact that the index closed around the 200-DMA suggests that a short-term recovery is possible. Critical resistance is placed between 10,070 (100-DMA) and 10,173 points, while support is placed at 9,790 points being the 200-DMA.

The Stochastic Oscillator on the daily chart has now started to bottom out while being well oversold, thus suggesting the possibility of a short-term recovery. The RSI too is approaching the oversold region and could lead to a short-term recovery. However on the weekly chart the Stochastic Oscillator has assumed a downtrend and has generated a sell signal in the process. MACD have conformed to their respective downtrends and in the process have generated sell signals.

The first support is at 9,749 points and the second support is at 9,658 points. The first resistance is at 9,862 points and the second resistance is at 9,918 points

KSE-100 Index: Short-Term Recovery Possible As 200-DMA Tested; Indicators Oversold On Daily Chart

The Keystone for August 13, 2010

First support 9,749 points, second support 9,658 points; First resistance 9,862 points, second resistance 9,918 points

The index opened positive and after remaining range-bound through most of the day, took to a sharp downtrend to close well in the red and around the 200-DMA. Volumes declined by 58.57% and stood at 25.54 mln (1st day of Ramadan, hence shorter working hours). The fact that the index closed around the 200-DMA suggests that a short-term recovery is possible. Critical resistance is placed between 10,070 (100-DMA) and 10,173 points, while support is placed at 9,790 points being the 200-DMA.

The Stochastic Oscillator on the daily chart has now started to bottom out while being well oversold, thus suggesting the possibility of a short-term recovery. The RSI too is approaching the oversold region and could lead to a short-term recovery. However on the weekly chart the Stochastic Oscillator has assumed a downtrend and has generated a sell signal in the process. MACD have conformed to their respective downtrends and in the process have generated sell signals.

The first support is at 9,749 points and the second support is at 9,658 points. The first resistance is at 9,862 points and the second resistance is at 9,918 points

KSE-100 Index: Short-Term Recovery Possible As 200-DMA Tested; Indicators Oversold On Daily Chart

The Keystone for August 13, 2010

First support 9,749 points, second support 9,658 points; First resistance 9,862 points, second resistance 9,918 points

The index opened positive and after remaining range-bound through most of the day, took to a sharp downtrend to close well in the red and around the 200-DMA. Volumes declined by 58.57% and stood at 25.54 mln (1st day of Ramadan, hence shorter working hours). The fact that the index closed around the 200-DMA suggests that a short-term recovery is possible. Critical resistance is placed between 10,070 (100-DMA) and 10,173 points, while support is placed at 9,790 points being the 200-DMA.

The Stochastic Oscillator on the daily chart has now started to bottom out while being well oversold, thus suggesting the possibility of a short-term recovery. The RSI too is approaching the oversold region and could lead to a short-term recovery. However on the weekly chart the Stochastic Oscillator has assumed a downtrend and has generated a sell signal in the process. MACD have conformed to their respective downtrends and in the process have generated sell signals.

The first support is at 9,749 points and the second support is at 9,658 points. The first resistance is at 9,862 points and the second resistance is at 9,918 points

KSE-100 Index: Formation Suggests Short-Term Recovery Possible; Overall Trend Bearish

The Keystone for August 12, 2010

First support 9,807 points, second support 9,753 points; First resistance 9,931 points, second resistance 9,989 points

Analysis and Overview:

The index opened positive and after touching its day's high, took to a sharp downtrend to close well in the red and below the 50-DMA. Volumes declined by 34.57% and stood at 61.64 mln. Despite the fact that the index closed below the 50-DMA, it managed to sustain above its former double top at 9,850 points. This suggests that a short-term recovery is possible. Critical resistance is placed between 10,078 (100-DMA) and 10,173 points, while support is placed at 9,790 points being the 200-DMA.

The Stochastic Oscillator on the daily chart has become well oversold thus suggesting the possibility of a short-term recovery. However on the weekly chart it has now assumed a downtrend and has generated a sell signal in the process. The RSI and MACD have conformed to their respective downtrends and in the process have generated sell signals.

The first support is at 9,807 points and the second support is at 9,753 points. The first resistance is at 9,931 points and the second resistance is at 9,989 points.

KSE-100 Index: Closing Below 50-DMA Adds Credence To The Bearish View; 30-DMA To Create Resistance

The Keystone for August 11, 2010

First support 9,836 points, second support 9,774 points; First resistance 9,929 points, second resistance 9,996 points

Analysis and Overview:

The index opened marginally negative and after forming a double top at its day's high, took to a sharp downtrend to close well in the red and below the 50-DMA. This adds credence to the view that the trend has turned bearish. Moreover volumes increased by 17.61% and stood at 94.21 mln, which indicates that the correction came in with volumes. The next support level is 9,780 points being the 200-DMA.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal, while on the weekly chart has now assumed a downtrend and generating a sell signal in the process. The RSI and MACD have conformed to their respective downtrends and in the process have generated sell signals.

Taking the above factors into consideration, any upside should be capitalized upon to sell as the overall trend has turned bearish. Going forward the next critical level should be the 200-DMA which currently stands at 9,788 points, while critical resistance stands at 10,120 points being the 30-DMA.

The first support is at 9,836 points and the second support is at 9,774 points. The first resistance is at 9,929 points and the second resistance is at 9,996 points

KSE-100 Index: Closing Below 30-DMA And 100-DMA Suggests Further Downside

The Keystone for August 10, 2010

KSE-100 Index: Closing Below 30-DMA And 100-DMA Suggests Further Downside

First support 9,953 points, second support 9,838 points; First resistance 10,107 points, second resistance 10,191 points

Analysis and Overview:

The index opened marginally positive and after touching its day's high, took to a sharp downtrend to close well in the red in the process breaching the 30-DMA as well as the 100-DMA. This suggests further pressure. Volumes increased by 33.06% and stood at 80.10 mln which suggests that the correction came in with relatively higher volume.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal. The RSI has also generated a sell signal and has now conformed to a steady downtrend. Moreover the MACD too has conformed to a downtrend and has now confirmed a sell signal.

Taking the above factors into consideration, any upside should be capitalized upon to sell as the trend has turned negative. Going forward the next critical level should be the 200-DMA which currently stands at 9,780 points.

The first support is at 9,953 points and the second support is at 9,838 points. The first resistance is at 10,107 points and the second resistance is at 10,191 points.

KSE-100 Index: Formation And Indicators Suggest Correction To Continue; Indicators Generate Sell Signal On Weekly Chart

The Keystone for August 09, 2010

First support 10,256 points, second support 10,186 points; First resistance 10,394 points, second resistance 10,480 points

The index opened flat and remained in the red throughout most of the session. However it witnessed a sharp recovery in the second half and after touching its day's high, took to a downtrend to close in the red. Volumes were marginally up by 0.45% and stood at 55.99 mln. Average weekly volumes declined by 22.43% and stood at 62 mln, while the index declined 204 points. The index reacted from its critical resistance band which is between 10,430 points and 10,539 points and registered a lower high and a lower low. This suggests that the correction is likely to continue. Critical support stands between 10,050 points 10,120 points.

The Stochastic Oscillator on the daily chart maintains its downtrend while on the weekly chart has now generated a sell signal while being extremely overbought. Moreover the RSI on the daily chart has taken to a downtrend and maintains its sell signal as well.

The above factors suggest that the index has started on a corrective trend. Hence any upside should be capitalized upon to sell.

The first support is at 10,256 points and the second support is at 10,186 points. The first resistance is at 10,394 points and the second resistance is at 10,480 points.

KSE-100 Index: Correction Likely To Continue As Resistance Band Clips Gains

The Keystone for August 06, 2010

First support 10,296 points, second support 10,236 points; First resistance 10,412 points, second resistance 10,475 points

The index opened on a positive note and after touching its day's high, took to a downtrend only to close in the red. Volumes declined by 23.17% and stood at 55.74 mln. The index took resistance from its resistance band, which is between 10,430 points and 10,539 points, in the process registering a lower high and a lower low. This makes the above mentioned levels a critical resistance for the index.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal, while the RSI has also generated a sell signal and has now conformed to a steady downtrend. Moreover the MACD too has conformed to a downtrend and has now confirmed a sell signal.

Taking the above factors into consideration, any upside should be capitalized upon to sell as the index is due for a correction.

The first support is at 10,296 points and the second support is at 10,236 points. The first resistance is at 10,412 points and the second resistance is at 10,475 points.

KSE-100 Index: Monday's Gap Creates Resistance; Critical Resistance Looming Overhead

The Keystone for August 05, 2010

First support 10,327 points, second support 10,276 points; First resistance 10,456 points, second resistance 10,532 points

Analysis and Overview:

The index opened on a positive note however after touching its day's high, took to a downtrend, momentarily dipping in the red, only to close flat. Volumes increased by 58.65% and stood at 72.55 mln. The index's formation is a shooting star which was created around Monday's gap. This is bearish. Moreover the index's critical resistance at 10,539 points looms overhead, which could clip gains.

The Stochastic Oscillator on the daily chart maintains its downtrend as well as its sell signal, while the RSI has also generated a sell signal after becoming overbought. Moreover the MACD too has conformed to a downtrend and has just about generated a sell signal.

Taking the above factors into consideration, any upside should be capitalized upon to sell as the index is due for a correction.

The first support is at 10,327 points and the second support is at 10,276 points. The first resistance is at 10,456 points and the second resistance is at 10,532 points.

KSE-100 Index: Formation And Indicators Suggests Uptrend Nearing Completion; Critical Resistance Could Clip Gains

The Keystone for August 03, 2010

First support 10,309 points, second support 10,239 points; First resistance 10,443 points, second resistance 10,507 points

Analysis and Overview:

The index opened significantly negative however after touching its day's low it showed a marginal recovery only to close in the red. Volumes declined by 30.24% and stood at 79.51 mln. The index's formation confirms the view of a top and establishes 10,539 points as a significant resistance level. Critical supports lie between 10,000 and 10,170 points.

The Stochastic Oscillator on the daily has now generated a sell signal after becoming extremely overbought, while the RSI has also generated a sell signal after becoming overbought. Moreover the MACD too is starting to lose steam and could generate a sell signal in the near term.

Taking the above factors into consideration, any upside should be capitalized upon to sell as the index is due for a correction.

The first support is at 10,309 points and the second support is at 10,239 points. The first resistance is at 10,443 points and the second resistance is at 10,507 points

KSE-100 Index: Formation And Indicators Suggests Uptrend Nearing Completion; Critical Resistance Could Clip Gains

The Keystone for August 02, 2010

First support 10,448 points, second support 10,366 points; First resistance 10,564 points, second resistance 10,621 points

The index opened marginally positive and after touching its day's low, took to a steady uptrend to close in the green. Volumes increased by 62.07% and stood at 113.98 mln. Average weekly volumes marginally increased by 1.06% and stood at 80 mln, while the index gained 223 points. The index closed around its critical resistance at 10,530 points. This is a critical resistance level for the index and it usually does not sustain above it for too long.

The Stochastic Oscillator on the daily and weekly chart has now started to stall while extremely overbought. Moreover the RSI on the daily chart is overbought as well, while on the weekly chart it is approaching its critical resistance level.

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 10,448 points and the second support is at 10,366 points. The first resistance is at 10,564 points and the second resistance is at 10,621 points.