Composite Index Daily Technical Analysis, 08/06/2005 

KLCI gained 2.52 points on Wednesday, June 08, 2005, closed above the WinChart automatic Fibonacci Retracement 878.22 points. Therefore, 878.22 points is now the support level, so does the S1 860 points, while the R1 is still the next resistance. 10 days Bollinger Bands contracted 16%, giving no strong signal for KLCI next direction. Nevertheless, if KLCI were going to break out the R1 resistance, T1 will be the next resistance, thus forming a descending triangle. (Refer A). 

Total market volume increased 76.5%, standing above the 40 days VMA. Generally, this is a good sign for it represents the overall market is relatively active. (Refer to B). 

MACD gave a buy signal on Wednesday, with the MACD line crossed above the trigger line. However, readers are advised to take note that if the Bollinger band width remains contracting, the significant of MACD signal is reduced. It is usually a good idea to wait for the Bollinger Bands confirmation before execute any buying orders. (Refer to C)

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