As indicated by A, the FBM KLCI tested the Bollinger Middle Band on Thursday, but it managed to rebound from the Bollinger Middle Band, to close at 1272.78 points, closing the last trading day of the year 2009 with a yearly gain of 396.03 points or 45.2%.

Since the KLCI is still supported by the Bollinger Middle Band, the Bollinger Middle Band is still serving as the dynamic support for the KLCI. Resistance for the KLCI is at 1288 WinChart Automatic Fibonacci Retracement while the support is still at 1257 WinChart Automatic Fibonacci Retracement.

As indicated by B, total market volume increased 2.7%, but still it is getting closer to the 40-day VMA level, as the 40-day VMA level is gradually falling. Nevertheless, if the KLCI should have the Chinese New Year effect with volume breaking above the 40-day VMA level, it would certainly improve the market sentiment at a whole.

As circled at C, the MACD rebounded at the zero level and also breaking above the trigger line. This suggests that the KLCI mid to longer term is regaining some strength. This positive signal for the KLCI shall remain intact until the MACD line should break below the trigger line.

In conclusion, the KLCI support at the Bollinger Middle Band is an important signal, as it shows that the immediate outlook is still on the positive side. If the Bollinger Bands should expand again with the KLCI above the Bollinger Middle Band, more upside room is expected.

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