KS Energy - Bullish breakout suggests more upside to come

Positive breakout at key resistance. KS Energy could be poised for more upside in the weeks ahead after breaking above the key $1.28 level (support-turned-resistance and 1.5-year downtrend line) on heavy volume yesterday.

Upside momentum intact. The MACD indicator has just risen above the centerline recently, suggesting that the tone has turned positive.

Near-term consolidation likely. However, the RSI is currently indicating overbought signals, alluding to the possibility of a nearterm correction.

Key support at $1.28. We think that the immediate support at $1.28 is key, although we do see subsequent supports at $1.08 (resistance-turned-support and 100-day MA), followed by $0.97 (trough in Jul ‘09)

Initial resistance at $1.39. But should there be a successful retest of the $1.28 level, it will confirm the breakout. This could lead to a test of the initial resistance at $1.39 (peaks in Oct ’08 and May ‘09), ahead of the next resistance at $1.51 (2009 high).

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