As indicated by A, the KLCI continues its technical rebound on Friday and precisely resisted at T2 line. This shows that the T2 line is temporary the resistance for the KLCI. Meanwhile, the 887 WinChart Automatic Fibonacci Retracement is the next resistance for the KLCI, while support remains at the 800 mark.

As shown on the chart, the Bollinger Bands Width contracted 14%, suggesting the KLCI is consolidating, and the first target of the technical rebound is usually at the Bollinger Middle Band. In other words, the KLCI has to break above the Bollinger Middle Band in order to break away from the bearish region.

As indicated by B, total market volume declined 16.7%, but still above the 40-day VMA level, therefore, suggesting the overall market is still relatively active. Generally, if the KLCI should rebound with strong volume, it is a positive sign.

As circled at C, the Stochastic is now reaching 50% level after breaking above the 30% level, suggesting a continuation of its technical rebound. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI.

To sum up, the KLCI is now testing the T2 line as well as the Bollinger Middle Band dynamic resistance, and therefore, with the market sentiment remain weak, the outlook for the KLCI would still be bearish biased if the KLCI should fail to break above these resistance lines.

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