On Wednesday, the KLCI continued its rebound and tested the L1 uptrend line (as indicated by A). If the KLCI should return to above the L1 uptrend line, the KLCI might resume its uptrend movement. Support for the KLCI is at 1257 WinChart Automatic Fibonacci Retracement while the resistance is at 1288 WinChart Automatic Fibonacci Retracement followed by the 1300 psychological level.

As shown on the chart above, the KLCI also managed to closed above the Bollinger Middle Band, and this suggests that the KLCI might regain its positive position. However, since the Bollinger Bands is now contracting (5%), it won't be able to confirm the bullish signal, but only suggests that the KLCI is still consolidating. But still, this is a good sign, implying that the short term bearish movement caused by the sudden negative news might be over soon.

As indicated by B, total market volume increased 3.7%, and therefore, volume is still below the 40-day VMA level. This is rather normal for the KLCI is consolidating while investors are taking cautions, and the overall market participation is relatively quiet.

As circled at C, the Stochastic is now testing the 70% level. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI. And if the Stochastic could maintain above 70% level, the short term bullish biased movement is expected to continue.

With the KLCI returning to above the Bollinger Middle Band, the immediate outlook for the KLCI has turned positive, while awaiting for the re-expansion of the Bollinger Bands to confirm the bullish signal. In short, if the Bollinger Bands should re-expand with the KLCI staying above the Bollinger Middle Band, it would be a bullish signal, and the KLCI would resume its uptrend. However, if the Bollinger Bands should expands with the KLCI below the Bollinger Middle Band, it would be a bearish biased signal.

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