As indicated by A, the KLCI pulled back after hitting above the 20-day Bollinger Upper Band, which suggested an over-bought signal for the KLCI. The pull-back effect is a form a technical correction, and it is considered normal after a rally.

Immediate support for the KLCI is still at the Bollinger Middle Band dynamic support as well as the 920 level, while the resistance is at 972 WinChart Automatic Fibonacci Retracement. Meanwhile, as the KLCI is moving further away from the T1 and T2 downtrend channel, it is likely to form a new trend.

As indicated by B, total market volume declined 9.5%, but still above the 40-day VMA level. This shows that the market participation is still active. As long as the KLCI is still supported by the rising Bollinger Middle Band, with volume above the 40-day VMA level, the positive movement of the KLCI is expected to continue.

As indicated by C, the Stochastic started to retreat after hitting 100%, which is a sign of over-heating. However, as long as the Stochastic could remain above 70% level, the market movement for the short term is still bullish biased. In short, the criteria for the KLCI to maintain its upside movement are volume above the 40-day VMA level and the KLCI above the Bollinger Middle Band.

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