For the week ended on the 30th of December, 2005, the Composite ended higher, gaining a total of 7.66 points, closing the 2005 year end at 899.79 points.

Main Chart:
After trending in the downtrend channel for about 2 ? months, the KLCI finally break out from the downtrend channel on Thursday, 29th of December. However, after the break out, the KLCI was soon resisted by another possible longer downtrend resistance (R1), which is drawn by connecting this year's peak at 953.88, the congestion area around mid October, and the high of this year's last trading day at 902.56.

In addition, the 900 psychological level remain the important hurdle for the KLCI, and support for the KLCI is now at T1 dynamic support as well as the 10 day Bollinger middle band dynamic support.

Bollinger Bands:
After Thursday's break out, the 10 days Bollinger band width begun widen up by 21%, and on Friday, expanded another 5% with the KLCI situated above he middle band. If the Bollinger band width continues to widen up, more upside movement for KLCI is anticipated. Nevertheless, the KLCI must not fall below the middle band for it is the immediate support.

Volume:
Total market volume for the week stood at 1.2 billion shares, a 4.9% lower than last week's total market volume, due to the replacement of the Christmas holiday. On the daily perspective, volume was rather promising on Wednesday, Thursday, and Friday. As indicated by the B circle, volume were able to break above the 40 days VMA level suggesting that the market was well participated and the growth of volume also authenticated the break out on Thursday. Growth of volume remains an important factor, if a rally were to take place in January 2006. (Study B)

MACD:
As indicated by C, the MACD line has been moving gradually higher since 6/12/2005, and the Bullish signal triggered on the 9/12/2005 is still intact. At the moment, MACD histogram continue ticking higher suggesting that the bull is still in control. Market sentiment is likely to remain bullish until a round top signal is seen. (Study C)

WinChart RSI:
Despite the break out of the downtrend channel and the growth of volume, WinChart remains in the neutral region giving no bullish indication to the KLCI. Currently, the WinChart reading is at around 56% suggesting that the market sentiment in the mid-term is likely to stay at neutral with a slight positive bias. (Study D)

Stochastic:
On Thursday, %K of the Stochastic almost touching 100%, and soon drawn back on Friday. Currently, the %D line is still at the neutral zone giving now confirmation to the bullish signal of %K line. However, if the %D line can break above the 70% with the %K remaining above the 70%, short-term market sentiment is likely to be bullish. (Study E)

In the Nut-Shell:
Although some short term signal suggest that the KLCI is bullish, sentiment of the KLCI for the longer term remains doubtful. Nonetheless, as long as the market is actively participated, with the KLCI staying above the Bollinger middle band, a brighter outlook for the KLCI still attainable.

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