Composite Index Daily Technical Analysis, 04/05/05 

KLCI on Wednesday, 04/05/05, had another bullish day. It opened gap up and closed on the daily high at 903.07 point, up 11.04 points (1.2%). KLCI today breached yet another Fibonacci Resistance of the 900.38 point. Therefore, the current resistance is at the WinChart Automatic Fibonacci Retracement of 909.95, while the supports fall on 900.38 and 890.8 points. In addition, 10 days Bollinger Band Middle band will be the dynamic support. 

Volume of the KLCI has finally broken above the 40 days VMA. For the day, volume was up 24.2%. In order for KLCI to sustain this up beat momentum, volume traded above the 40 days VMA is imperative. (Refer to B) 

20 days Bollinger Band opened 41% today, and as mentioned on yesterday’s analysis, KLCI daily candle chart has totally gone above and away of the upper band, therefore, we shall see a pull-back effect very soon. Nevertheless, from our past experiences, gaps of KLCI are usually filled shortly. Therefore, when the pull-back effect happens, where the target of the pull-back effect is at around the 10 days Bollinger Band Middle Band, it should close today’s gap as well. (Refer to A) 

Indicators wise, we see that both RSI and Stochastic are above 70% level, thus signaling a mid-term and short-term bullish market sentiment respectively. As long as RSI stays above the 70% level, there will be more upside movement for KLCI. (Refer to C) On the other hand, STC %K is at 100% level, indicating a short-term over bought market. Therefore, KLCI will have a correction very soon, and the short-term correction is signaled when the %K crossed down %D line.

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