After being over-sold, the FBM KLCI rebounded strong on Thursday, gaining 20.22 or 1.6%, which is the largest daily gain since the 8th of March, 2010. As indicated by A, the KLCI is now testing the 200-day Moving Average line, and if the KLCI could break above the 200-Moving Average, it would break away from the bear market territory. Support for the KLCI is at 1254 WinChart Automatic Fibonacci Retracement while the resistance is at 1272 which is the 61.8% WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted for the first day after expanded for 6 trading days, this suggests that the KLCI might be consolidating, while the Bollinger Middle Band is also a target of the technical rebound.

As indicated by B, total market volume declined 7%, with volume touching the 40-day VMA level. Overall, the market is relatively active, but in order to sustain the KLCI gains, more volume is needed to offset the selling pressure.

As indicated by C, the Stochastic rebounded after staying below 10%, short term over-sold region. However, the Stochastic has not broken above 30% level, thus suggesting that the short term bearish signal remains intact.

The KLCI rebounded, in line with the regional markets, while testing the 200-day MA. Technically, the KLCI has to break above 200-day MA in order to avoid entering the bear market.

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