Example

Daily UK Stock Report

March 30 2006

PSN

Opinion: Negative

Further to our negative comment of March-9, yesterday's weak close at 13.17 is further evidence that a substantial correction of the near 65% rise from October is underway. Prices have now reached the wide area of support at 1315/1297 and a close below here will give a medium term breakdown signal for a decline to 1190.

What would indicate a different scenario ?

Short term momentum is now clearly down and in order to reverse this developing trend, a close above nearest resistance at 1344/1353 is required.

Key bull triggers activated by closing break

PSN relative to FTSE 100

Resistances

Implications if overflowed

1344/1353

Stabilises prices above key support at 1313/1297 which is developing into a solid base. Expect a return to the highs at 1432/1435.

Key bear triggers activated by closing break

Supports

Implications if broken

1315/1297

Break of key support. Gives a medium term breakdown signal for a decline to 1190. We adopt 1250 as a short term target.

1250

A test of strong support at 1190 indicated as the next event.

Supports and Resistance table - Nearest Levels*

Supports

1315/1297

1250

1190

Resistances

1344/1353

1432/1435

* A close above any given resistance, or beneath support is needed to confirm a break.

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