Composite Index Daily Technical Analysis, 22/06/2005

Composite Index closed higher on Wednesday with a gain of 7.02 points. KLCI precisely supported at the Bollinger Middle Band, therefore, Bollinger middle band is a crucial support for KLCI. For the coming days, KLCI will face a critical resistance at 906 points. (Refer to A)

Total market volume gained 35% on Wednesday, strongly above the 40 days VMA. A higher volume for the coming days is needed to confirm the break-out if the KLCI were going to break-out from the 906 resistance. (Refer to B)

As shown in C, we suspect a “round bottom” signal from the MACD histogram not too far from now. Therefore, it pays to study the histogram for a “round bottom” formation for it would signal the end of the technical correction.

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