Composite Index Daily Technical Analysis, 13/06/2005 

Composite Index attempted to break out the Descending Triangle. Although the KLCI managed to close above the T1 of the descending triangle, this is yet to be confirmed. In order to be a valid break out, KLCI has to stay above the T1 line for the coming days; a fall below the T1 will signal a false break out for KLCI. Nevertheless, KLCI new resistance is at the 899.89 WinChart automatic Fibonacci Retracement and the support will be the 878.22 Fibonacci as well as the 10 days Bollinger Middle Band. (Refer to A) 

Total market volume on Monday decreased another 7.4%, but still higher than the 40 days VMA. Users and readers are advised to take note of a divergence in the volume. To be specific, let’s examine the price movement of the KLCI for the pass three trading days, where the index had been advancing while the volume has been declining. Therefore, a technical correction is likely to happen soon. (Refer to B) 

Despite KLCI had a vigorous movement lately, DMI (Directional Movement Index) has not shown any sign of a bull market. Although +DI crossed the –DI on last Friday, ADX remained flat above. Therefore, even if there is a bull signal from the +DI, it would be a weak bull if ADX falls lower. (Refer to C)

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