Due to the 2.6% gain of the Dow Jones Industrial Average Index, Asian markets are opening higher. The KLCI opened higher at 1020.13 points and soon profit taking activities kicked in and the KLCI retreated and tested the 1000 point level, losing most of the early gains. However, the KLCI managed to rebound from the 1000 level, closing the day at 1008.87 points, down marginally 0.49 points. This shows that the 1000 mark is still the support for the KLCI, while other supports are at the 200-day MA as well as the Bollinger Middle Band dynamic support.

As shown on the chart above, the Bollinger Bands Width expanded 14%, with the KLCI still above the Bollinger Middle Band. This shows that the current movement for the KLCI is still bullish biased. As long as the Bollinger Bands Width should continue to expand, more up side room is expected for the KLCI. If the Bollinger Bands Width should begin to contract, it would be a signal suggesting a consolidation.

As indicated by B, total market volume increased 8.5%, suggesting some increased of selling pressure but still with strong buying interests. Therefore, the market overall is still very active. Generally, provided that the market volume is above the 40-day VMA level, the KLCI is likely to sustain its current bullish movement.

As circled at C, the Stochastic started falling but still remained above the 70% level, suggesting the short term movement of the KLCI is still bullish biased. If the Stochastic should break below 70% level, it would be a signal suggesting a beginning of a technical correction.

Generally, the market was slightly over-reacted as the KLCI suddenly opened higher, and therefore, some selling pressure is seen. Nevertheless, the KLCI uptrend remains intact, and as long as the KLCI is well supported by the 200-day MA as well as the Bollinger Middle Band, coupled with volume above the 40-day VMA level, the uptrend of the KLCI is likely to continue.

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