As indicated by A, the KLCI broke above the 937 WinChart Automatic Fibonacci Retracement, closing 23.49 points higher to 941.38 points, and marked a 6 months new high. Therefore, the immediate support for the KLCI is at 937 while the next resistance is at 970 level. Meanwhile, the Bollinger Middle Band and the T1 uptrend line are still the dynamic support for the KLCI.

As shown on the chart above, the Bollinger Bands Width expanded 18%, with the KLCI above the Bollinger Middle Band, and therefore, this suggests that the KLCI is resuming its upward movement. As long as the Bollinger Bands Width is still expanding, more upside room is expected for the KLCI.

As indicated by B, total market volume increased 61.5%, and marked a new high since 10th of March, 2008 (the first trading day after the General Election). This shows that investors are regaining some confidence in the local market as the buying interest increases. Anyhow, volume above the 40-day VMA level is an important element for the KLCI to sustain its bullish movement.

As circled at C, the MACD histogram ticked up and forming a rounding bottom, suggesting an end to the short term consolidation signal, and the KLCI is resuming its rally. Meanwhile, the MACD line is still rising above the zero level, suggesting the medium to longer term movement of the KLCI is still improving.

For now, the requirements for the KLCI uptrend are in place, coupled with the Dow Jones Industrial Average returning to above 8000 level, as well as the regional markets are still rising, the outlook for the KLCI is still bullish biased. If the Bollinger Bands Width should contract in the near future, it would be a signal suggest another consolidation for the KLCI.

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