Composite Index Daily Technical Analysis, 16/05/2005 

KLCI correction continued on Monday. At the moment, the L2 support at around 885 points, as well as 31 EMA serve as a critical support for KLCI. If KLCI manage to stay above the L2 and 31 EMA, the formation of T1 uptrend support line is likely to be valid. (Refer to A) 

At the mean time, L1 at 907.5 as well as the 900.38 WinChart Automatic Fibonacci Retracement also serve as the resistances. Anyway, for the day, KLCI lost 2.09 points (-0.2%). Total market volume for the day stood at 3,287,609 lots, staying below the 40 days Volume Moving Average. (Refer to B) 

10 days Bollinger Bands contracted another 23% indicating that KLCI is indeed consolidating. Until Bollinger Band Width re-open, KLCI next direction remains unclear. 

As indicated in the C circle, WinChart RSI fell below the 70% level entering the mid-term neutral zone. If KLCI remain sideways, RSI will be moving around the 50% level, however, if RSI stays above the 50% level, we would interpret it as the market sentiment remain as neutral with an upside bias.

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