For the week ended on the 2nd of September, 2005, the Composite Index gave up 9.2 points or 1% to close at 909.18 points. Weekly high was at 916.08 on Monday while on Friday, KLCI touched a weekly low at 906.54 points.

Main Chart:
For this week, KLCI was trading at a narrow range while managed stand above the 906 support level. This is also a Fibonacci retracement line at 906.36, to be exact. At the moment, KLCI is facing a hurdle at 917.57 Fibonacci resistance, which by the way, is also around the level of the dynamic resistance of the Bollinger middle band.

Bollinger Bands:
After last weeks narrowing of the band width, the 10 days Bollinger Bands re-opened this week with the KLCI constantly staying below the middle band. As a result, immediate outlook for KLCI is bearish bias; until we see a contraction of the band width, which could imply a consolidation for KLCI, and hopefully above the 906 level. (Study A)

Volume:
Total market volume for this week stood at 13.34 million lots, a 27.8% decline from last week's total volume. This is partly due to the shortening of the trading week for the National Day. Nevertheless, volume at this level suggests that the market is indeed quiet. (Study B)

MACD:
Ever since breaking below the zero-level on last Thursday, the MACD line has been descending perpetually. Until now, there is no indication of any reversal signal from the MACD line. However, using the MACD histogram, we could notice that the histogram, on the other hand, is moving gradually higher this week. Although it is not any conventional divergence signal, nor it is any strong indication of any possible reversal, it simple suggests that the Bear is getting weaker if compared to last week's momentum. (Study C)

WinChart RSI:
Undoubtedly, the WinChart RSI is also showing bearish signal with the indicator is now situating below the 30% level. According to this signal, it suggests that the mid-term market sentiment is still bearish. In other words, as long as the WinChart RSI remains at this region, the market is still bearish bias. (Study D)

Stochastic:
In conjunction with the mid-term bearish sentiment, the Stochastic is also showing a short-term bearish market sentiment. At this moment, no visible signal could suggest a reversal for KLCI. (Study E)

In the Nut Shell:
With all the indicators showing bearish bias, it is hardly possible for KLCI to steer away from the downside tendency. However, since the KLCI is now cautiously supported by the 906 level, we hope to see this support follow through for it will then neutralize some selling pressure thus promoting the KLCI to build a firmly ground. After that, chances for the KLCI to reverse are much higher. But until then, out look for KLCI is still bearish.

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