As indicated by A, the KLCI broke above the 887 resistance level after being supported by the Bollinger Middle Band dynamic support. Therefore, the immediate support for the KLCI is now at 887 level and the next resistance is at 900 psychological level.

As shown on the chart, the Bollinger Bands width has not expanded. If the Bollinger Bands Width should expand with the KLCI above the Bollinger Middle Band, it would be a clearer bullish biased signal.

As indicated by B, total market volume increased 63%, reaching the 40-day VMA level at last. This shows that the market participation has improved, and if the volume should remain above the 40-day VMA level, chances for the KLCI to continue its bullish biased movement would be higher.

As circled at C, the MACD line is now breaking above the zero level for the first time since May 29th 2008, suggesting an improvement of the longer term movement. Provided that the MACD line is still rising above the zero level, the market movement of the KLCI is expected to stay positive.

In short, the KLCI had a good start for the year 2009, and coupled with the Chinese New Year effect, the immediate outlook for the KLCI is bullish biased, but still too soon to declare a bull run, because the KLCI is still below the 200-day moving average line.

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