After the long lower shadow candlestick on Monday, the KLCI technically rebounded on Tuesday, closing 6.09 points higher. (Study A). As shown on the chart, support for the KLCI remains at 1100 level, while the resistance is at 1140 WinChart Automatic Fibonacci Retracement line.

Since the expansion of the Bollinger Bands Width has reduced to 6% (compared to 16% on Monday), the KLCI managed to regain some of the losses. Therefore, the first target of this technical rebound is at the Bollinger Middle Band, which is the dynamic resistance for the KLCI. In other words, the KLCI has to break above the Bollinger Middle Band in order to be considered as a reversal signal.

Despite the rebound of the KLCI, total market volume declined 12.1%, suggesting the market has not yet recovered its confidence, as investors are remained on the sidelines. Nevertheless, since the 40-day VMA level is relatively lower, and therefore, should the market volume increase steadily it is likely that the market volume to return to a healthy level in the near future.

As circled at C, the Stochastic continue to climb and breaking above the 30% level marginally. This suggests that the short term movement for the KLCI is likely to improve. If the Stochastic should remain above the 30% level, the improvement is likely to continue.

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