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.