Composite Index Daily Technical Analysis, 28/06/2005

Composite Index rebounded on the WinChart automatic Fibonacci Retracement at 890.2 on Tuesday while resisted by the Bollinger middle band. Further resistance is located at the R1 (906 points), while the strongest support remains at the S1 (860 points). (Study A)

10 days Bollinger Bands opened unnoticeably with just 1%, therefore, the current market volatility is low. Total market volume shrank another 19.3% on Tuesday’s trading. Therefore, volume for the day was below the 40 day VMA level. (Study B)

As shown in circle C, MACD line is about to cross below the trigger line. A sell signal is confirmed when the MACD line crosses down the trigger line, thus market sentiment will turn bearish for the mid-term. However, readers are advised that during a consolidating market, the accuracy of signals from the secondary indicators is reduced. In our opinion, it is better to monitor Bollinger Bands at this stage.

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