As indicated by A, the KLCI breaks above the downtrend line, closing 11.63 points higher on Wednesday. Currently, the KLCI is set to test the 885 WinChart Automatic Fibonacci Retracement resistance while supports for the KLCI remains at the 869 WinChart Automatic Fibonacci Retracement as well as the Bollinger Middle Band dynamic support.

As shown on the chart above, the Bollinger Bands Width is still contracting, suggesting that the KLCI is still under its consolidating stage. Nevertheless, with the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI is now positive biased.

As indicated by B, total market volume declined 3% on Wednesday, but still reaching the 40-day VMA level. This shows that the overall market participation is still relatively active. Nevertheless, if the KLCI should attempt to break the 885 WinChart Automatic Fibonacci Retracement, more volume is needed to confirm the breakout.

As circled at C, the Stochastic returned to above 70% level, re-entering the short term bullish region. This suggests that the market movement for the short term is now bullish biased. Basically, as long as the Stochastic should remain above 70% level, the short term movement for the KLCI is expected to be bullish biased.

In conclusion, the immediate outlook for the KLCI is still positive as the KLCI is still supported by the Bollinger Middle Band. However, more volume is needed if the KLCI should break away from its consolidation and resume its rally, and of course, the Bollinger Bands Width would have to expands to signal a breakout of the consolidation.

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