For the week ended on the 18th of November, 2005, the Composite Index rebounded 3.37 points closing once again above the 900 level at 901.72 points.

Main Chart:
As shown on the chart above, the KLCI is indeed forming a descending wedge chart pattern, with the T1 as the important dynamic resistance and the T2 as the dynamic support. KLCI rebounded strongly on Friday at T2, but however it was soon resisted by the 10 days Bollinger middle band. (Study A)

Bollinger Bands:
Despite KLCI technically rebounded, for the entire week, KLCI was trading below the middle band. On Friday, the Bollinger band width contracted 5%, with the KLCI closing merely at the middle band level. If the Bollinger band width continue to contract, KLCI is likely to consolidate.

Volume:
Total market volume for the week stood at 12.72 million lots, a 5.9% lower than last week's total market volume. For the daily chart, total market volume remained below the 40 days VMA level, suggesting that the market was still lightly participated; thus, liquidity is low. (Study B)

MACD:
Although the MACD line has not crosses the trigger line yet, the histogram, on the other hand, is showing a bullish divergence signal on Friday. This signal is a short-term signal suggesting that the KLCI is likely to continue it's technical rebound in the short-term. Other than that, the overall long term signal from the MACD is still suggesting a negative market sentiment. (Study C)

WinChart RSI:
On Monday, the WinChart RSI signaled a class A bullish divergence, suggesting that the KLCI had found a temporary low, and was expected to have a technical rebound. The signal was valid. Currently, the WinChart RSI is away from the 30% level, suggesting that the mid-term bearish market sentiment has ended. At the moment, WinChart RSI is suggesting a neutral market sentiment for KLCI, and if the KLCI were going to go sideways, expect the WinChart RSI wander around the 50% level. (Study D)

Stochastic:
%K of the Stochastic broke above the 30% level on Friday. This is a first signal suggests that the short-term bearish sentiment has ended, and if the %D crosses above the 30% level, it shall confirm the %K signal. (Study E)

Momentum:
As indicated in F, the momentum indicator also suggests a bullish divergence signal. This signal implies that the KLCI has found a temporary low, and the technical rebound shall likely to continue. (Study F)

In the Nut Shell:
With the KLCI rebounded strongly on T2, we shall expect the KLCI to continue its movement inside the descending wedge. Although KLCI rebounded strongly, total market activities is generally still quiet. Since the Bollinger band width just began to contract, it suggests that the KLCI is likely to consolidate; and with some bullish divergence signals from the indicators, KLCI is expected to have a firm support at the 892-895 level.

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