With the news of the Ringgit unpeg announced on Thursday after market closed, KLCI opened gap up at 938.10 points on Friday. Soon the gap was filled in the early session where the KLCI rebound strongly at the W1 level. For the day, KLCI closed strongly higher at 939.69 points, up 17.75 points.

KLCI is now facing the all important resistance at 940 points, which is also the highest level for the year 2005. Needless to mention, this is a very strong resistance for KLCI. (Study A). Support wise, it is now located at W1 of the ascending wedge.

On Friday, KLCI had once again over heated where it is now above the 20 days Bollinger Upper Band. Therefore, a pull-back effect is due to happen soon.

Total market volume for the day was up 67%, stood at 6.9 million lots, which is above the 40 days VMA level. However, as a note of precaution, study and compare the volume level at B with the volume level at b'. With the comparison of the volume with the index point level, market volume on Friday was seemingly unsubstantial; thus, it is doubtful for such volume moment would have sufficient support to more upside movement for KLCI.

%K of Stochastic reached 100% level on Friday. This is an over-bought signal for KLCI, and would trigger some profit-taking, and as a result, technical correction for KLCI. Nonetheless, as long as Stochastic stays above the 70% level, market sentiment for the short-term remains positive. (Study C)

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