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