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.