Composite Index Daily Technical Analysis, 23/06/2005

Although Composite Index broke out from the 899.89 Fibonacci Retracement, it was resisted exactly at the 906 points. As we mentioned on yesterday’s analysis, a true break out has to be followed by a new high from the break out day, as well as higher volume than the break out day; since both conditions were not met, we suspects the break out is not confirmed. (Refer to A). 

10 days Bollinger Bands contracted 14%, indicating that the currently market volatility is low. Mean while, Bollinger Middle Band remains as the dynamic support for KLCI. Total market volume on Thursday retreated 12.1%, but still higher than the 40 day Volume Moving Average. (Refer to B) 

As noted in C circle, MACD histogram did not form a “round bottom” signal; therefore, technical correction has not yet ended. Overall, MACD line is firmly staying above the zero level, therefore, the overall market sentiment is still relatively positive.

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