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.