KSE-100 Index: Formation Indicative Of A Top; Indicators Have Entered Overbought Region

The Keystone for October 01, 2010

First support 9,957 points, second support 9,896 points; First resistance 10,054 points, second resistance 10,106 points

The index opened on a negative note however after touching its day's low around mid-day, took to an uptrend only to close in the red. Volumes increased by 92.81% and stood at 88.83 mln. The index has created a "Hanging Man" formation which in an uptrend is indicative of a top. Moreover it has created this formation around its 30-week moving average which is currently at 10,025 points as well as its short-term resistance trendline (blue line). This suggests that the uptrend is nearing completion.

The Stochastic Oscillator has now entered the overbought region and is at a level from where it usually reverses. Moreover the RSI too has leveled of and faces strong resistance from its previous top at 61.09 (14-D RSI). Hence any upside should be capitalized upon to sell.

The first support is at 9,957 points and the second support is at 9,896 points. The first resistance is at 10,054 points and the second resistance is at 10,106 points.

KSE-100 Index: Indicators And Formation Suggests Uptrend Nearing Completion; 30-Week MA Creates Resistance

First support 9,965 points, second support 9,918 points; First resistance 10,065 points, second resistance 10,123 points

The index opened marginally positive and after touching its day's low, took to an uptrend to close in the green. Volumes declined by 46.07% and stood at 46.08 mln. The index has created a double-top around its 30-week moving average which is currently at 10,025 points. This suggests that the uptrend is nearing completion.

The Stochastic Oscillator maintains its uptrend and is rapidly approaching the overbought region. Moreover the RSI continue to rise however is approaching its previous top at 61.09 (14-D RSI). Hence any upside should be capitalized upon to sell.

The first support is at 9,965 points and the second support is at 9,918 points. The first resistance is at 10,065 points and the second resistance is at 10,123 points.

Indicators Suggest Recovery To Continue; 30-DMA Creates Resistance

The Keystone for September 29, 2010

First support 9,928 points, second support 9,866 points; First resistance 10,040 points, second resistance 10,103 points

The index opened positive and remained strong throughout the day to close off the session in the green. Volumes increased by 25.57% and stood at just 86.74 mln. The index managed to register a higher high and a higher low, however, the 30-DMA created resistance. There is a bit more steam left in the recovery phase, with resistance placed between 10,050 and 10,140 points.

The Stochastic Oscillator maintains its uptrend as well as its buy signal having now reached the half-way mark of the overbought/oversold cycle. Moreover the RSI has shown some improvement as well. This confirms the above view that the recovery phase is likely to continue for now.

The first support is at 9,928 points and the second support is at 9,866 points. The first resistance is at 10,040 points and the second resistance is at 10,103 points.

KSE-100 Index: Formation Suggests Recovery To Continue As 200-DMA Creates Support

The Keystone for September 28, 2010

First support 9,881 points, second support 9,826 points; First resistance 9,988 points, second resistance 10,036 points

The index opened marginally negative however after touching its day's low, took to a steady uptrend to close off the session modestly in the green. Volumes increased by 42.20% and stood at just 69.08 mln. The index managed to register a higher high and a higher low, with the 200-DMA giving it support throughout most of the session. This is bullish and suggests that the index's short-term recovery is likely to continue.

The Stochastic Oscillator has now generated a buy signal having just cleared the oversold region thus adding credence to the above view of a recovery. Moreover the RSI has shown some improvement as well.

The first support is at 9,881 points and the second support is at 9,826 points. The first resistance is at 9,988 points and the second resistance is at 10,036 points.

KSE-100 Index: Formation Suggests Recovery To Continue As 200-DMA Creates Support

The Keystone for September 28, 2010

First support 9,881 points, second support 9,826 points; First resistance 9,988 points, second resistance 10,036 points

The index opened marginally negative however after touching its day's low, took to a steady uptrend to close off the session modestly in the green. Volumes increased by 42.20% and stood at just 69.08 mln. The index managed to register a higher high and a higher low, with the 200-DMA giving it support throughout most of the session. This is bullish and suggests that the index's short-term recovery is likely to continue.

The Stochastic Oscillator has now generated a buy signal having just cleared the oversold region thus adding credence to the above view of a recovery. Moreover the RSI has shown some improvement as well.

The first support is at 9,881 points and the second support is at 9,826 points. The first resistance is at 9,988 points and the second resistance is at 10,036 points.

KSE-100 Index: Closing Above 50-DMA And 200-DMA Suggests Short-Term Recovery To Continue; Weekly

The Keystone for September 27, 2010

First support 9,857 points, second support 9,797 points; First resistance 9,971 points, second resistance 10,026 points

The index opened flat and after initially dipping in the red, managed to sustain in the green throughout most of the session and close off the session on a positive note. Volumes increased by 23.28% and stood at 48.58 mln. Average weekly volumes declined by 28.29% and stood at 58 mln, while the index declined 143 points. The index on the daily chart managed to close above its 50-DMA and 200-DMA, while also creating a lower shadow. On the weekly, however, it has created an Engulfing Bearish formation which is indicative of a top. This suggests that the recovery is likely to a short term one.

The Stochastic Oscillator on the daily chart is extremely oversold and is on the verge of generating a buy signal. Moreover the RSI on the daily chart edged up slightly. On the weekly chart the Stochastic Oscillator maintains its buy signal, while the RSI has shown weakness. Moreover on the weekly chart the index failed to sustain above the 30-week moving average (currently at 10,025 points) which is bearish.

The first support is at 9,857 points and the second support is at 9,797 points. The first resistance is at 9,971 points and the second resistance is at 10,026 points.

KSE-100 Index: Decline With Low Volumes Suggests Possibility Of Recovery; 200-DMA Tested

The Keystone for September 24, 2010

First support 9,800 points, second support 9,739 points; First resistance 9,922 points, second resistance 9,978 points

The index marginally positive however after touching its day's high, took to a steady downtrend to close in the red. Volumes declined by 22.52% and stood at just 39.41 mln. The index's decline came in with low volumes, which suggests that there is a possibility of a short-term recovery. Moreover the index tested the 200-DMA thus increasing the possibility of a recovery. The test is to see if a follow through occurs. If the index fails to do so, the index could come down to test its next support level of 9,400 points.

The Stochastic Oscillator has now become oversold thus adding credence to the above view of a recovery. On the other hand the RSI and MACD continue to show weakness with the latter generating a sell signal. This suggests that the recovery would be a short-term one.

The first support is at 9,800 points and the second support is at 9,739 points. The first resistance is at 9,922 points and the second resistance is at 9,978 points.

KSE-100 Index: Test Of 200-DMA Likely To Create Support; Indicators Cooling Off

The Keystone for September 23, 2010

First support 9,888 points, second support 9,831 points; First resistance 9,995 points, second resistance 10,052 points

The index opened marginally positive however after touching its day's high, took to a downtrend to close off the session in the red. Volumes showed a decline of 42.51% and stood at 50.86 mln. The index registered a lower high and a lower low to close below the 50-DMA. This is bearish, however, the 200-DMA (currently at 9,885 points) looms below which could create support.

The Stochastic Oscillator maintains its sell signal however has cooled off considerably and is now approaching the oversold region. On the other hand the RSI and MACD continue to show weakness. The test is to see if the 200-DMA holds. Failure to do so would lead the index to test its lower trendline which is currently around 9,400 points.

Taking the above factors into consideration, it is advisable to play the range for now.

The first support is at 9,888 points and the second support is at 9,831 points. The first resistance is at 9,995 points and the second resistance is at 10,052 points.

KSE-100 Index: Indicators Continue To Remain Hawkish As Trendline Creates Resistance

The Keystone for September 22, 2010

First support 9,928 points, second support 9,863 points; First resistance 10,050 points, second resistance 10,107 points

Analysis and Overview:

The index flat however after touching its day's high, took to a downtrend to close off the session in the red and around its day's low. Volumes showed an increase of 36.00% and stood at 88.47 mln. The index negatively reacted from its channel's resistance and closed marginally below the 50-DMA. This is bearish and suggests that the correction is likely to continue.

The Stochastic Oscillator maintains its sell signal thus confirming the bearish view. Moreover the RSI continues to show weakness. Also on the weekly chart the MACD continues on its downtrend and maintains its sell signal.

The index is in a consolidation phase with 10,139 points being the resistance and support is placed at 9,875 points being the 200-DMA. Play the range for now.

The first support is at 9,928 points and the second support is at 9,863 points. The first resistance is at 10,050 points and the second resistance is at 10,107 points.

KSE-100 Index: Indicators Get Chance To Cool Off As Consolidation Underway

The Keystone for September 21, 2010

First support 10,005 points, second support 9,945 points; First resistance 10,133 points, second resistance 10,202 points

The index on a positive note however after touching its day's high it remained range-bound to close off the session in the green, which was below the open. Volumes showed a marginal decline of 2.24% and stood at 65.05 mln. The index's formation is a filled green candlestick which suggests that the trend is waning.

The Stochastic Oscillator maintains its sell signal, which makes the formation a bearish divergence. Moreover the RSI continues to show weakness. Also on the weekly chart the MACD continues on its downtrend and maintains its sell signal.

The index is in a consolidation phase with 10,139 points being the resistance and support is placed at 9,875 points being the 200-DMA. Play the range for now.

The first support is at 10,005 points and the second support is at 9,945 points. The first resistance is at 10,133 points and the second resistance is at 10,202 points

KSE-100 Index: Closing Above Moving Averages With Volumes Suggests Uptrend To Continue

The Keystone for September 15, 2010

First support 10,022 points, second support 9,947 points; First resistance 10,182 points, second resistance 10,268 points

The index opened on a positive note and remained strong throughout the day to close well into the green. Volumes were twice those of Thursday and stood at 100.56 mln. This is the highest volume since 30th July. The index sustained itself above the 30-DMA, 50-DMA and 200-DMA and closed well above it. This suggests that the index's inertial momentum is likely to continue for now. Critical resistance is placed between 10,260 points and 10,430 points.

The Stochastic Oscillator maintains a strong uptrend but has become overbought. This is usually commonplace when a breakout occurs. In the case of the index, it has given a breakout above its moving averages, hence could continue to remain so for a short while. Moreover the RSI maintains a steady uptrend and has some room before it becomes overbought. A cautious buy strategy is suggested.

The first support is at 10,022 points and the second support is at 9,947 points. The first resistance is at 10,182 points and the second resistance is at 10,268 points

KSE-100 Index: Lackluster Performance With Low Volumes Suggests Formation An Adjustment In The Downtrend

The Keystone for September 07, 2010

First support 9,646 points, second support 9,588 points; First resistance 9,759 points, second resistance 9,817 points

The index opened on a negative note and after touching its day's high in the initial hours, took to a steady downtrend and remained in the red throughout the day only to recover and end the day on a marginally positive note. Volumes were dismally low showing a decline of 47.67% and stood at a paltry 19.63 mln. The index continued to show weakness and registered a lower high and a lower low which suggests that the formation was more of an adjustment in the downtrend.

The Stochastic Oscillator has now generated a sell signal after becoming overbought, while the RSI has started to show some weakness. Moreover, the 30-DMA has cut the 50-DMA and 100-DMA from above which is a bearish signal and adds credence to the view.

The first support is at 9,646 points and the second support is at 9,588 points. The first resistance is at 9,759 points and the second resistance is at 9,817 points.

KSE-100 Index: Formation Confirms Top As 200-DMA Creates Resistance; Indicators Generate Sell Signal

The Keystone for September 06, 2010

First support 9,627 points, second support 9,550 points; First resistance 9,772 points, second resistance 9,850 points

The index opened marginally negative and after touching its day's high, took to a steady downtrend to close in the red. Volumes declined by 14.38% and stood at 37.52 mln. The index's 200-DMA has now confirmed its status as a critical resistance level for the index. As a result the index registered a lower high and a lower low to close in the red, thus adding credence to Thursday's candlestick which was a signal of a top.

The Stochastic Oscillator has now reversed its trend and has generated a sell signal after becoming overbought, while the RSI has started to show a gradual weakness. On the weekly chart the 50-week moving average (currently at 9,775 points) continues to create resistance for the index.

The first support is at 9,627 points and the second support is at 9,550 points. The first resistance is at 9,772 points and the second resistance is at 9,850 points

Keystone: KSE-100 Index: Formation Indicative Of A Top As 200-DMA Creates Resistance

The Keystone for September 03, 2010

First support 9,700 points, second support 9,628 points; First resistance 9,827 points, second resistance 9,892 points



The index opened on a negative note and after touching its day's high, took to a steady downtrend. It however recovered and managed to close in the green. Volumes declined by 16.14% and stood at 43.82 mln. The index's 200-DMA created strong resistance which led to the index creating a double-top. Moreover the formation created by the index is a 'Shooting Star' which in an uptrend is indicative of a top and suggests that the index could assume a downtrend in the near term.

The Stochastic Oscillator maintains its uptrend however it has now entered the overbought region, while the RSI has leveled off. Moreover, the 30-DMA, 50-DMA and 100-DMA maintain their respective downtrends, with a strong possibility that the 30-DMA and 100-DMA are likely to cut the 50-DMA from above.

The first support is at 9,700 points and the second support is at 9,628 points. The first resistance is at 9,827 points and the second resistance is at 9,892 points.

KSE-100 Index: 200-DMA Creates Strong Resistance As Index Remains Under Pressure

The Keystone for September 02, 2010

First support 9,665 points, second support 9,587 points; First resistance 9,791 points, second resistance 9,857 points

Analysis and Overview:

The index opened on a negative note and remained under pressure throughout the day to close in the red. Volumes declined by 36.01% and stood at 52.25 mln. The index's 200-DMA created strong resistance which caused the index to open and subsequently remain in the red throughout the day. This suggests that the short-term recovery is nearing completion and any upside should be capitalized upon to sell.

The Stochastic Oscillator continues to maintain its uptrend and is rapidly approaching the overbought region, while the RSI leveled off. Moreover, 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 100-DMA are likely to cut the 500-DMA from above.

The first support is at 9,665 points and the second support is at 9,587 points. The first resistance is at 9,791 points and the second resistance is at 9,857 points.