For the week ended on the 23rd of December, 2005, the Composite Index ended 1.24 points lower to 892.13 points.

Main Chart:
Last week, the KLCI were basically moving sideway with the exception of Friday where the KLCI opened lower and gave up 3.72 points that day. As presented by the chart above, the KLCI failed to break out from the T1 dynamic resistance line, thus remained in the down trend.

Support for the KLCI is found at 883 Fibonacci retracement line and the T2 dynamic support line. Resistance for the KLCI would be at the T1 dynamic resistance line as well as the 900 psychological resistance level. (Study A)　

Bollinger Bands:
For the most part of this week, the Bollinger band width was pretty much contracting. On Friday, the Bollinger band width re-opened 26%, after the consolidation, with the KLCI situated below the middle band. This is a negative signal for it suggests more down side risk for the KLCI if the band width continue to widen up.

Volume:
Total market volume for the week stood at 1.337 billion of shares, a slight increase of 3.8% from last week's total market volume. On the daily chart, the market volume for most of the week were basically closer to the 40 days VMA level. This is not a significant sign of increasing volume for it is merely because of the average line moving gradually lower after such lengthy low volume market. Nevertheless, theoretically if we saw the market volume reaching above the 40 days VMA level, it suggests that the market participation is relatively active. (Study B)

MACD:
As outlined by the C curve, the MACD histogram continued moving lower and the round top signal is still intact. This suggests that the bull is getting weaker, and the market is going through a technical correction. The bull is expected to be weaker until the histogram begins to move higher where a round bottom signal is sighted. (Study C)

WinChart RSI:
On Thursday, WinChart RSI breached above the 50% level and at the moment, the reading of the WinChart RSI is at around 61.8%. This suggests that the mid-term market sentiment for KLCI is at neutral with some positive bias. As long as the WinChart RSI remains in the neutral region, market direction would generally be unclear. (Study D)

Stochastic:
Stochastic, on the other hand, is showing a somewhat negative bias signal with the %K line now dropped below the 30% region. This suggests that the short-term market sentiment is now bearish. The %D line is still situated in the neutral region. If the %D line entered below the 30% level, it shall confirm the %K signal and market sentiment for the short-term is expected to be bearish. (Study E)

In the Nut-Shell:
With signals from the indicators showing mostly neutral to bearish sentiment, outlook for KLCI is likely to be bearish unless a break out above the T1 line. At the moment, the only element which would help the KLCI to break above the T1 line would be the increasing of volume. If the growth of volume does not take place, the KLCI is most likely to remain in the down trend.

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