As indicated by A, the KLCI opened lower with a gap on Thursday due to the over-night falling of the US Market, but the KLCI managed to rebound strongly during the afternoon session, closing only 11.33 point lower. Resistance for the KLCI is still at 1035 WinChart Automatic Fibonacci Retracement, while the support is seen at the 900 round number psychological level.

As shown on the chart above, the Bollinger Bands Width is still expanding, suggesting that the KLCI movement is still negative biased. Nevertheless, the KLCI formed a long lower shadow candlestick, and with the pull-back effect which is due to take place after the KLCI stayed below the 20-day Bollinger lower band, the KLCI could have a better chance for a technical rebound.

As indicated by B, total market increased 53.2% on Thursday, breaking above the 40-day VMA level, therefore, suggesting an increased of market participation as investors taking advantage of the over-sold market, as implied by the long lower shadow candlestick.

As circled at C, the Stochastic %K line rebounded despite the KLCI ended lower, suggesting a sign of a possible technical rebound in the near future. If the Stochastic should break above 10%, it would be a signal suggesting a beginning of a technical rebound.

Despite a good chance of a technical rebound from the technical point of view, the market trend for the long term remains bearish biased as local and external sentiment is still weak. Unless the KLCI should break above the Bollinger Middle Band and that would slightly improve the technical outlook of the KLCI.

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