On Monday, with the positive performance of the regional markets, the KLCI was lead by Finance blue chip counters, breaking above 1308 resistance with an opening gap, to close at 1324.22, gaining 24.44 points or 1.9%. The KLCI marked a new high since March 2008. Resistance for the KLCI is now at 1354 WinChart Automatic Fibonacci Retracement while the support is at 1300 level.

As shown on the chart above, the Bollinger Bands expanded 39%, with the KLCI above the Bollinger Middle Band, thus giving a bullish signal. Generally, provided that the Bollinger Bands is still expanding with the KLCI above the Bollinger Middle Band, the bullish movement is expected to carry on.

As indicated by B, total market volume increased 23%, with volume breaking above the 40-day VMA level. This suggests that the market in general is regaining some confidence, and if volume should remain above the 40-day VMA level, the positive market sentiment is expected to carry on.

As indicated by C, the Stochastic remains above 70% level, in the short term bullish territory. Therefore, this suggests that the short term movement of the KLCI is still bullish biased, until the Stochastic should break below 70% level.

In conclusion, with the KLCI breaking above the 1300 level, together with the bullish Bollinger Bands signal, the immediate outlook is set to be bullish. If the Bollinger Bands should begin to contract, or the expansion rate should reduce, the KLCI is likely to consolidate again.

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