Composite Index Weekly Analysis 29/04/2005 

Main Chart:

For week ended on 29/04/05, KLCI was up 1.18 points. Although on Monday, KLCI pulled back 5.8 points from the break-out of the down trend-channel, KLCI remained above the T1 down-trend resistance, and therefore, this serves as a dynamic support for KLCI. 

As mentioned on last week’s weekly analysis, KLCI indeed move side-ways between the WinChart Automatic Fibonacci Retracement of 878.96 and 859.81. On Friday, KLCI managed to breach through the 878.96 resistance but failed to close above it, but remarkably closed right at 878.96. Therefore, the immediate resistance is 878.96 and 10 Bollinger Band Middle. As for the supports, it would be the 10 day Bollinger Band Middle Band, and Fibonacci at 859.81. (Refer to A) 

Bollinger Band

For most of the week, 10 days Bollinger Band was contracting, except for Friday where it opened 14%. This is a positive sign for KLCI was closed above the Middle Band. Should Bollinger Band opens wider next week, we shall we more up side movement of KLCI, however, this is best to confirm with sufficient volume. 

Volume

Volume trade for the week was below 40 days Volume Moving Average (VMA), thus insufficient to give any support for KLCI to move higher. This could be one of the reasons why KLCI failed to close above the Fibonacci 878.96 on Friday. (Refer to B) Also another reason for the weak volume for this week was the anticipation of next Monday’s closure of Bursa Malaysia. 

MACD

MACD line continued to tilt higher and getting closer to the zero level. This was a positive sign showing that the market sentiment had turned slightly brighter. None the less, the mid-term macd-crossed over buy signal triggered on 13/04/05 is still intact. (Refer to C)

RSI

Similar to MACD, RSI, for the week, slightly turned higher and getting closer to 70%. If RSI can breach over the 70%, it signals a mid-term bullish sentiment. Any how, technically, RSI remained in the neutral zone for the moment. (Refer to D) 

Stochastic

On Friday, %K of Stochastic broke above 70% and contacted at 90% level. However, this is yet to be confirmed with %D which is still situated below 70% at a neutral zone. If %D can break above and stay above 70% level, it will signal a short-term bullish sentiment. 

DMI

On daily DMI, we saw a bullish signal on Wednesday, 27/04/05,when the +DI crossed over – DI from bottom. However ADX was declining from above giving no confirmation, therefore, we see this as a weak bullish signal. 

In the Nutshell

For the week, KLCI continued going side-ways between Fibonacci Retracement of 878.96 and 859.81. With all secondary indicators turning slightly positive, all we need is to see the trading volume above 40 days VMA. Until then, KLCI will remain side-ways for the next week.

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