Composite Index Daily Technical Analysis, 18/05/2005 

KLCI on Wednesday dropped 5.02 points (-0.6%) at 886.37 points. 10 days Bollinger Band opened 13%, and the KLCI is located below the Middle Band, therefore the immediate picture of KLCI has turned bearish. However, KLCI was supported by L2 as well as the T1 dynamic support. In other words, if KLCI can successfully stay above the L2 and T1 support, we shall see the KLCI moving in the trading range of L1 and L2. 

At the same time, we do not discount the possible formation of the T1 uptrend line if KLCI can rebound at T1. Of course, it has to be confirmed with a relatively stronger volume above the 40 days VMA. Total market volume on Wednesday fell 1.1%, remained below the 40 days volume moving average (Refer to B). 

As indicated in the C circle, %K of Stochastic has fell below the 10% level entered the short-term over-sold zone. Therefore, KLCI is likely to have an technical rebound very soon.

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