As indicated by A, the KLCI finally returned to above the T1 line, this has definitely improved the technical outlook for the KLCI. Nevertheless, the KLCI still has to break above the 1089 WinChart Automatic Fibonacci Retracement, which was the previous support level, and the KLCI might still have a chance to form a double bottom. Therefore the 1089 is the important resistance level for the KLCI. Support for the KLCI is at 1064 followed by the 1035 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width contracted 7%, suggested that the KLCI is consolidating. With that, the first target for the KLCI will be the Bollinger Middle Band. If the KLCI should break above the Bollinger Middle Band, the immediate outlook for the KLCI will improve.

As indicated by B, total market volume only increased 3.7% despite the KLCI rebounded 14.17 points, this suggests that the rebound was mostly due to some buying on select blue chips but the overall market participation is still low. Generally, total market volume has to maintain above the 40-day VMA level in order to sustain the market rally.

As indicated by C, the MACD histogram continued rising while forming a rounding bottom, suggesting that the short term movement for the KLCI is improving. The improvement of the KLCI is expected to continue until the MACD histogram should start falling and forms a rounding top.

With the KLCI above the T1 line, the immediate technical picture for the KLCI has improved, and the next target will be the 1089 WinChart Automatic Fibonacci Retracement. It is absolutely important that the KLCI is supported with volume above the 40-day VMA level to sustain the improvement of the KLCI.

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