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.