As shown on the chart above, the FBM KLCI broke above the 14, 21, 31 EMA as well as the 1300 psychological level. The KLCI had its intra-day high reaching 1312.1 points but profit taking pulled down the KLCI, giving up its earlier gains, to close at its opening level, up only 4.76 points or 0.4%. Support for the KLCI is at 1297 and 1300 level, while the resistances are at 1309 followed by 1325 WinChart Automatic Fibonacci Retracement.

As indicated by A, despite the KLCI breaking above 1300 level, it formed a Gravestone Doji Candlestick pattern, suggesting some stronger selling pressure. Therefore, the KLCI bullish signal is yet to be confirmed.

As indicated by B, total market volume increased 29.5%, but still below the 40-day VMA level. This suggests that the overall market participation is still low, thus insufficient to sustain the KLCI gains.

As indicated by C, despite the KLCI ended higher, the Stochastic falls, as a result of the long upper shadow of the Gravestone Doji. Nevertheless, the Stochastic is still above 70%, in the short term bullish territory. If the Stochastic should break below 70% level, it would be a signal suggesting a beginning of a technical correction.

In conclusion, the KLCI immediate outlook is still on the positive side, as it is now above the 14, 21, 31 EMA. However, it is likely to face some strong selling pressure.

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