The KLCI ended 2.9% higher on Thursday, in line with the Asian markets as triggered by news of the US Federal Reserve cutting key interest rate. As indicated by A, the KLCI is now testing the T2 line, which is also at the similar level of the Bollinger Middle Band dynamic resistance. Therefore, this is likely to be a stronger resistance.

Support for the KLCI is at 800 mark while the resistance is still at 887 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted 10%, suggesting a consolidation or technical rebound signal for the KLCI. Generally, the first target for the KLCI would be the Bollinger Middle Band. If the KLCI should break above the Bollinger Middle Band, it would improve the immediate outlook for the KLCI.

As indicated by B, total market volume increased 49.5%, which is a 7 month new high level. The increased of volume was associated with the rising of price, thus a positive signal suggesting some increased of buying interests in the market. Therefore, if the KLCI should continue to rebound with volume staying above the 40-day VMA level, the market sentiment is likely to improve.

As circled at C, the Stochastic breaks above 30% level, thus a signal suggesting a beginning of a technical rebound. If the Stochastic should continue rising, the rebound is expected to continue. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI.

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