On Thursday, the KLCI gained 3.25 points, to close at 1249.42 points. As indicated by A, the KLCI is testing the 1250 WinChart Automatic Fibonacci Retracement, and the 1250 is still the current resistance for the KLCI. If the KLCI could break above this level, more upside room is expected for the KLCI. Support for the KLCI is at 1233.45 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 18%, suggesting that the KLCI is still consolidating in the downtrend. Generally, the KLCI has to break above the Bollinger Middle Band in order to break away from the immediate downtrend.

As indicated by B, total market volume increased 5%, but volume is still below the 40-day VMA level. This suggests that the overall market participation is still low, which is typical as the KLCI is still consolidating.

As indicated by C, the Stochastic is breaking above 50% level, suggesting that the KLCI is gaining some strength as a technical rebound. If the Stochastic should break and remain above 70% level, it would be a signal suggesting a short term bullish movement for the KLCI.

In short, the KLCI rebounded 3 days, while currently precisely testing the 1250 resistance. Since the KLCI has not broken above the Bollinger Middle Band, coupled with the contra trading behavior, the KLCI is expected to meet a stronger over-head resistance. Nevertheless, if the KLCI should break above the Bollinger Middle Band with improved market sentiment, there is still a chance for the KLCI to resume its previous uptrend.

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