The KLCI opened gap down 13.16 points on Friday, after massive sell down of the US and European markets, but the KLCI managed to close the gap and ended ended with a 1.02 points gain, to close at 1332.89 points. As indicated by A, the KLCI returned to above the L2 line.

Support for the KLCI is at 1320.29 WinChart Automatic Fibonacci Retracement as well as the L2 line, while resistance is at 1350 WinChart Automatic Fibonacci Retracement. As shown on the chart above, the Bollinger Bands expanded 6%, with the KLCI below the Bollinger Middle Band, thus the immediate technical outlook remains on the negative side.

As indicated by B, total market volume increased 4.4%, with volume touching the 40-day VMA level. With the KLCI rebounding, the increased of volume suggests some bargain hunting activities.

As circled at C, the Stochastic rebounded at 30%, without entering the short term bearish territory, and if the Stochastic could break above 50% level, the KLCI short term is likely to rebound.

In conclusion, the KLCI has not formed a valid downtrend yet, as the Bollinger Bands is still now showing any valid bearish signals. Nevertheless, the global market conditions are definitely affecting our local sentiment.

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