Daily KLCI Analysis 22/04/05 

KLCI, on Friday 22/04/05, opened gap up and broke away from the down trend channel (T1). Nevertheless, KLCI hit a resistance at the WinChart automatic Fibonacci Retracement of 878.96 and soon retreated. In addition, 31 day Exponential Moving Average (EMA) is a significant resistance (A). As for the current support, it would be the all important down trend channel resistance (T1), and Fibonacci line at 859.81. For the day, KLCI closed at 877.78, up 5.87 point or 0.7%. 

Little change for 10 days Bollinger Band, indicating that the current volatility is still low, also suggesting a side ways market or a consolidation phase. On the other hand, on a positive side, KLCI is above the Bollinger Band Middle Band, and should Bollinger Band open wider with the price above the middle band, we should see more up side movement. 

In order to confirm that the break out is true, it should be supported with volume above 40 VMA. Friday’s volume was up 7.9%, unfortunately, it is still below the 40 VMA (B), thus showing the currently market participation is still weak. Therefore, we should be careful of a false break out. 

As indicated in C, RSI broke above 50% showing that the market mid-term sentiment is turning slightly brighter. However, should KLCI go side ways, RSI would be wandering around the 50% level and its significance is reduced.

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