Copyright (c) 1997-2005 (M) Sdn Bhd 
All Rights Reserved.

For the week ended on the 26th of August 2005, KLCI closed at 918.38 pts, losing 7.16 points with a weekly high on Tuesday touching at 928.58 points while a weekly low at 915.06 points on Friday.

Main Chart:
For the early part of this week, KLCI were supported by the L1 support line as well as the 50days EMA (Exponential Moving Average) dynamic support, but later on Thursday, KLCI broke below the L1 support and at last, on Friday, the KLCI closed below both the L1 support as well as the 50 days EMA line with a dogi candle pattern. Therefore, support for KLCI is now a the 917.57 points of the WinChart Automatic Fibonacci Retracement, while the resistance are at the L1 and the 50 days EMA dynamic resistance. (Study A)

Bollinger Bands:
In addition to the above, notice how the KLCI was resisted by the 10 days Bollinger middle band on Tuesday, Wednesday, and Thursday, where all three days' highs were resisted unmistakably at the middle band. Hence, the 10 days Bollinger middle band is definitely a critical hurdle for KLCI if it were to regain some lost ground.

Although the band width of the 10 days Bollinger Bands has not given any negative signals, the KLCI is indeed situated below the middle band. Therefore, if for any reason the Bollinger band width were to broaden up, more down side risk for KLCI is inevitable.

Volume:
Total market volume for the entire week stood at 18.48 million lots, a 7.2% increased from the last week's total market volume. However, for the entire week, the daily volume were still below the 40 days VMA (Volume Moving Average) level. This suggests that the activities for the market were rather inactive, and it is improbable to give any support to the KLCI if it were to reverse strongly. (Study B)

MACD:
Ever since the sell signal triggered by the MACD line in the early of August, the MACD line has been moving lower constantly. On Friday, the MACD line has even broken below the zero level, this suggests that the long term market sentiment could have been threaten. Although we now see that the MACD histogram showing a round bottom signal, which suggests a short-term technical rebound or consolidation, long term sentiment has unquestionably turned cautious. Should the MACD line continue to trend lower, expect a more negative market sentiment. (Study C)

WinChart RSI:
With the WinChart RSI situated below the 30% level, market sentiment for the mid-term remains bearish. For this week, the WinChart RSI has been going in line with the MACD line which suggests a dampen market sentiment. (Study D)

Stochastic:
Although on Wednesday, %K of the Stochastic has breached marginally above the 30% level, signaling a first positive sign for KLCI. However, it was not confirmed by the %D, and indeed, the %K went back into the short-term bearish zone on the next day. At this moment, both lines of the Stochastic are positioned below the 30% level suggesting that the market sentiment has not turn positive yet. (Study E)

In the Nut Shell:
With the negative consensus of indicators from different time frames couple with the break below the support level, we could suspect that it is rather not easy for the KLCI to make any positive move, thus market outlook starts to seem unfavorable unless the KLCI were to go side ways above the next support level at 917.

Copyright 1997-2005 Straits Index (M) Sdn. Bhd.