As indicated by A, the KLCI opened lower again in the early session as affected by the over night losses in the US markets. However, the KLCI managed to regain its early losses and closed 1.56 points higher. Resistance for the KLCI remains at the 887 WinChart Automatic Fibonacci Retracement while the support is still at 800 points.

As shown on the chart, the KLCI remains below the Bollinger Middle Band, and therefore, the immediate outlook for the KLCI is still on the negative side. On Friday, the Bollinger Bands Width only expanded 9%, which is still not significant, but if the Bollinger Bands Width should continue to expands with the KLCI below the Bollinger Middle Band, more downside risk for the KLCI is expected.

As indicated by B, total market volume increased and returned to above the 40-day VMA level. This suggests some increase of some buying interests as the Asian markets rebound in the afternoon. Generally, if the KLCI should continue to rebound with volume above the 40-day VMA level, it would be a positive sign for the KLCI.

As circled at C, the Stochastic remains below 30% level, suggesting the short term movement for the KLCI is still bearish biased. However, if the Stochastic should break above 30% level, it would be a signal suggesting a beginning of a technical rebound.

In short, the KLCI remains in the T1 and T2 downtrend channel, but if the Stochastic should break above 30% level, with the KLCI returning to above the Bollinger Middle Band, chances for the KLCI in breaking above the downtrend channel is generally higher.

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