As indicated by A, the KLCI breaks above the T2 line, and therefore, returning to the downtrend channel of T1 and T2 lines. However, the KLCI was precisely resisted by the Bollinger Middle Band, and this is the first target of the KLCI as mentioned earlier, as the Bollinger Middle Band is the dynamic resistance for the KLCI. If the KLCI should break above the Bollinger Middle Band, the immediate outlook for the KLCI would improve.

Currently, the resistance for the KLCI is at 1164 level and the T1 downtrend line; and the support is at 1120 WinChart Automatic Fibonacci Retracement line and the T2 line. In addition, the KLCI also managed to close the gap on the 4th of July, and therefore, some selling pressure is expected to increase.

Despite the KLCI rebound, total market remains below the 40-day VMA level, and therefore, the market participation is still weak. In short, if the KLCI would like to regain its strength, the market volume must be higher than the 40-day VMA level. (Study B)

As circled at C, the Stochastic breaks above the 30% level, and suggesting a technical rebound signal for the KLCI. The short term market signal is likely to improve if the Stochastic should stay above the 30% level. If the Stochastic should break above the 70% level, more the short term movement for the KLCI is likely to improve further.

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