For the week ended on the 21st of October 2005, the Composite Index lost a total of 16.01 points to 909.58 or 1.7% lower.

Main Chart:
After seven consecutive days of falling, support for KLCI is now at the important 906 Fibonacci retracement. This is also the 50% retracement from this year's low of 860 to this year's high of 953. On the other hand, resistance for KLCI is now at the 10 days Bollinger middle and dynamic resistance.

Bollinger Bands:
On Monday, 10 days Bollinger band width opened 11% with the KLCI situated below the middle. This was a first signal suggesting possible downside movement for KLCI. Indeed, Bollinger band width continued to open wider, and therefore, KLCI fell lower. However, on Thursday and Friday, KLCI was below the 20 days Bollinger lower band, and therefore, a pull-back effect is likely to happen soon, thus KLCI is likely to have a technical rebound. (Study A)

Volume:
Total market volume for the week stood at 19.17 million lots, while on the daily basis, daily volume were generally lower with an exception on Wednesday. Nonetheless, as a tradition of KLCI, unlike the rally where we have to see volume higher than the 40 days VMA level, for a decline, we do not need to have the same criteria. But still, if the volume is higher during a decline, it suggests a stronger selling activities. (Study B)

MACD:
Together with the Bollinger band signal, MACD triggered a sell signal on Monday. Until Friday, the MACD line descended continuously, thus, market sentiment is now bearish. Mean while, no visible round bottom signal from the histogram suggesting that the bear is still in control. If we see a round bottom signal from the histogram, it would suggest that the KLCI is having a technical rebound. (Study C)

WinChart RSI:
Currently, WinChart RSI has already entered the mid-term bearish zone (below 30% level). This suggests that the market sentiment for KLCI is bearish, and KLCI is likely to go lower as long as the WinChart RSI remains below the 30% level. (Study D)

Stochastic:
Both %K and %D of Stochastic are situated in the short-term bearish zone (below 30% level). Market is likely to be bearish provided we see these two lines remain below the 30% level. If the %K breaks above the 30% next week, KLCI might have a chance to consolidate, thus market risk is slightly reduced. (Study E)

In the Nut Shell:
According to technical indicators, sentiment for KLCI in the short-term to mid-term is likely to stay bearish with a likelihood of a technical rebound. At the moment, it is best for KLCI to consolidate at the 906 level for it would ease some selling activities and then the next factor to watch out for would be the 10 days Bollinger middle band resistance. If KLCI fail to break above the resistance, any opening of the Bollinger bands would suggests another decline.

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