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For the first trading day of the year 2006, the Composite Index ended lower, easing 6.94 points to 892.85 points. As shown on the chart above, the KLCI is still resisted by the R1 dynamic resistance line as well as the 900 psychological resistance. (Study A)

Mean while, the 10 days Bollinger band width expanded 6% with the KLCI situated below the middle band. This suggests that an increase of the downside risk for KLCI. Therefore, immediate sentiment for the KLCI is now negative bias.

Although the KLCI ended lower, total market volume, on the other hand, rose 36.5%, standing at 499 million shares. This suggests that the market now is well-liquid. If the KLCI can hold up above the T1 level with the continuous of the strong volume, a break out above the 900 level is still possible. Other wise, the high volume would suggests a heavy sell down of the market. (Study B)

%K of the Stochastic suggests that the short-term bullish sentiment has now ended. On Tuesday, the %K has entered the short-term bearish region, however, the %D remains above the 50% level, giving no confirmation of the %K signal. (Study C)

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