Composite Index Daily Technical Analysis, 17/05/2005 

10 days Bollinger Bands contracted 29% on Tuesday, showing that the volatility of KLCI is getting low. As a result, KLCI continued its consolidation between the L1 and L2 trading range. For the day, KLCI gained 2.12 points (0.2%). (Refer to A) 

As mentioned on yesterday’s analysis, KLCI remained above the L2 supports as well as the 31 days EMA. Therefore, if KLCI stays above these support levels, we shall see some upside potential for KLCI. At the moment, we can assume that the T1 trend support is still valid unless the above mentioned supports levels are violated. 

Total market volume on Tuesday increased 4.9%, but still below the 40 days Volume Moving Average. However, from a technical analysis point of view, this is considered normal to a sideways market. Nevertheless, if KLCI were supported by T1, with a clear Bollinger Band buy signal, volume traded above the 40 days VMA is a must to confirm the move. (Refer to B) 

WinChart RSI once again pulled up, and was very close to the 70% level. Therefore, if RSI breaches above the 70% level successfully, we shall conceive that the mid-term market sentiment has turned bullish. But, until then, WinChart RSI remains at neutral zone with an upside bias. (Refer to C)

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