For the week ended on the 9th of September, 2005, the Composite Index closed higher with a total gain of 8.74 points. Weekly high was at 921.16 on Thursday while the weekly low was at 907.12 points on Monday.

Main Chart:
After approaching the support level at the 906.36 Fibonacci Retracement line, the KLCI rebounded on Monday, and since then, the KLCI has been advancing gradually for the most part of the week.

Since the KLCI has managed to break above the 10 days Bollinger middle band, and therefore, it is serving as a dynamic support for KLCI. Other than that, the 906 Fibonacci retracement is also an important support level. On the other hand, resistance for KLCI is found at the 931 Fibonacci level, while the biggest hurdle for KLCI would be this year's high at 953.88 points.

Bollinger Bands:
Even since the rebound from the 906 level, the 10 days Bollinger band width has been contracting, suggesting a consolidation of the KLCI. On Wednesday, KLCI broke above the middle band and until now, the KLCI is situated above the middle. This is a good sign for the KLCI has been trading below the middle for that past few weeks. Nevertheless, if the Bollinger band width open with KLCI above the middle, it would grant more upside room for KLCI. (Study A)

Volume:
Total market volume for the week stood at 17 million lots, a 27.5% increase from last week's total market volume. However, volume at this level is still below the 40 days VMA. As a result, it suggests that the market is still relatively quiet. Since we are prospecting a possible upward signal from the Bollinger bands, it would be an additional advantage for KLCI if we see the volume starts to pick up. (Study B)

MACD:
In line with the rebound of KLCI from the 906 level, the MACD line turned its direction upward on Tuesday and getting closer to the signal line (also known as trigger line). As a result, the histogram also moving higher, signaling that the bearish mood was being neutralized gradually. As pointed in the C circle, we are very likely to see a buy signal when the MACD line crosses above the trigger line. Therefore, this signal is likely to happen early next week. This signal would be stronger if we see an opening of the Bolligner band width, or else, the significance of this buy signal is reduced. (Study C)

WinChart RSI:
On Wednesday, WinChart RSI breached above the 30% level, suggested that the bearish sentiment for KLCI has over. Currently, the RSI is situated in the neutral zone, suggesting that the mid-term market sentiment is neutral. Since the most important factor of any indicators is its direction, and if we see the WinChart RSI continues pointing higher, sentiment for KLCI could turn to bullish bias from neutral. (Study D)

Stochastic:
At this moment, %K of Stochastic has gone above the 70% level and entered the short-term bullish zone. As a result, it suggests that the KLCI short-term outlook is bullish. As for the %D, it signaled that the short-term bearish mood for KLCI has confirmed ended, and it is now situated in the neutral zone. If we see the %D moving into the 70% level, it should confirmed that the KLCI has entered the short-term bullish zone. Nevertheless, as long as we see %K above the 70% level, market out look for the short-term should remains bullish. (Study E)

In the Nut Shell:
With the KLCI rebound from the 906 level, plus some positive reversal signals from the indicators, we expect short-term outlook for KLCI to turn bullish. In our opinion, it is crucial to pay attention to the development of the 10 days Bollinger band with the MACD signal. If the Bollinger band width increases with the buy signal from the MACD, market is expected to go higher. Of course, increase of the market volume is an extra factor favorable to the KLCI.

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