World No. 1 Annika Sorenstam (70) and overnight leader Rachel Teske (72) share fourth place at 5-under-par 139.
Stupples collected three birdies on each of her nines and tallied only one bogey for her round of 67. She needed only 27 putts on Friday and the Englishwoman has her sights set on a European Tour victory so she can accumulate Solheim Cup points.
'The Solheim Cup is something I would love to play in and it's a goal of mine that I want to play,' said Stupples. 'I feel I am ready now and it's something I would love to do.
'I held my concentration all day and it feels really good to be leading this event. I've been practicing really hard in the two months I've had off and now I feel ready to play.'
Rosales was nearly flawless on Friday with seven birdies and no bogeys. She hit every fairway, missed only one green in regulation and only took 28 putts in a round of 7-under 65.
Knight recorded three birdies and a bogey, but a pair of eagles on par-4s at Royal Pines moved the Australian up the leaderboard. She holed a 9-iron from 127 yards at the seventh and a 5-iron from 170-yards at the final hole for a round of 6-under 66.
'It was an unbelievable round of golf,' said Knight. 'To get two eagles in a round of golf is quite some feat, but to get two, both of them on par-4s is pretty unusual.'
Grace Lee (66), Kylie Pratt (67), Virginie Auffret (69), Stefania Croce (71), Laura Davies (71) and Mhairi McKay (70) share sixth place at 4-under-par 140.
The 36-hole cut fell at 3-over-par 147 with 66 players advancing to the weekend. Among the players missing the mark were reigning U.S. Women's Open champion Hilary Lunke and European Solheim Cuppers Paula Marti and Elisabeth Esterl, all of whom missed the cut at 5-over-par 149.