The KLCI ended higher on Friday, as lead by the overnight gains of the US Markets, the KLCI closed 6.1 points higher at 1335.93 points. As indicated by A, the KLCI broke above the 1334.34 WinChart Automatic Fibonacci Retracement, and now testing the L1 resistance line. Immediate support for the KLCI is at 1334.34 WinChart Automatic Fibonacci Retracement followed by the 1308 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 17%, with the KLCI above the Bollinger Middle Band, thus giving a bullish signal. The bullish movement of the KLCI is expected to carry on until the Bollinger Bands should contract, or until the expansion rate should reduce.

As indicated by B, total market volume increased 2.5%, with the volume standing above the 40-day VMA level. This suggests that the overall market is still actively participated, and therefore, the positive market sentiment is likely to sustain.

As indicated by C, the Stochastic breaks above 90%, suggesting that the short term movement of the KLCI is indeed bullish. If the Stochastic should touch 100%, it would be a signal suggesting an over-heated short term movement, thus a technical correction could take place. Nevertheless, provided that the Stochastic is still above 70% level, the short term movement of the KLCI is expected to be bullish biased.

In conclusion, with the KLCI breaking above 1334.34, the immediate technical outlook for the KLCI is still positive, and the KLCI is set to test the L1 line. Despite the L1 resistance line, the uptrend of the KLCI shall remain intact, if the KLCI should stay above the 14, 21, 31 EMA.

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