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