After forming a long-shadowed candlestick on Monday, the KLCI continued its technical rebound on Tuesday, gaining 7.6 points. As indicated by A, the KLCI is now still below the L1 uptrend line, and this suggests that the KLCI has not regained its strength. In addition, the L1 line over-laps with the Bollinger Middle Band, which suggests that it is an important resistance for the KLCI. Other than that the 1288 and 1300 level are still the resistance for the KLCI while the support is now at 1257 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands only expanded 5%, suggesting that the Bollinger Bands might be contracting soon. If the KLCI could break above the Bollinger Middle Band, it is likely that the current negative trend might come to an end, and may be even a chance to resume its previous uptrend.

As indicated by B, total market volume declined 24.4%, with volume below the 40-day VMA level. This shows that the overall market participation is now relatively quiet, which is quiet normal as investors are being cautious amid the uncertainties of the market condition. Generally, with volume below the 40-day VMA level, the KLCI is likely to stay in consolidation.

As circled at C, the Stochastic continue to rebound, suggesting that the KLCI short term has regain some lost ground. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI, suggesting that the KLCI would resume its bullish biased movement.

In short, the KLCI rebounded after a panic selling on Monday. However, despite the rebound, the KLCI remains below the Bollinger Middle Band, and therefore, the immediate outlook for the KLCI is still on the negative side until a valid break out above the Bollinger Middle Band.

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