As indicated by A, the KLCI broke above 905 WinChart Automatic Fibonacci Retracement, closing 16.76 points higher to 923.77 points. Since 905 WinChart Automatic Fibonacci Retracement is also very closed to the 900 psychological level, it is now the important support for the KLCI, while the resistance is now at 937 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width expanded 14% with the KLCI above the Bollinger Middle Band, therefore, the immediate outlook for the KLCI is still bullish biased, and the Bollinger Middle Band is also serving as the dynamic support for the KLCI together with the T1 uptrend line.

As indicated by B, total market volume declined 6.6%, but still further above the 40-day VMA level. This shows that the market is still actively participated, with sufficient liquidity to absorb the selling pressure at the resistance. Therefore, provided that the volume is still above 40-day VMA level, the current bullish biased sentiment is likely to sustain.

As circled at C, the Stochastic %D line is now above 90% level, suggesting that the short term movement of the KLCI is over-bought. Therefore, there is a risk of a technical correction for the KLCI. Nevertheless, if the Stochastic should remain above 70% level, the market movement for the short term is still bullish biased.

After the rebound at T1 on the 31st of March, the KLCI gained 54 points or 6.3% in just 5 trading days. Therefore, it is totally normal if the KLCI should have a correction. From technical analysis point of view, the best correction would be a low-volatile sideways movement. If the KLCI should remained supported by the 14, 21, 31 EMA or the T1 line, the uptrend is expected to sustain.

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