On Thursday, the KLCI started to retreat after rising for 7 days. The KLCI close at 1334.08 points. Resistance for the KLCI remains at 1350 while the support is at 1325 WinChart Automatic Fibonacci Retracement.

As indicated by A, if the KLCI could stay at above 1335 level, it would not form a Double Top pattern. Nevertheless, the Bollinger Bands only expanded 8%, while the Bollinger Middle Band is the dynamic support.

As indicated by B, total market volume declined 22.7%, with volume below the 40-day VMA level. Technically, total market volume has to stay firmly above the 40-day VMA level in order for the KLCI to sustain its bullish movement.

As indicated by C, the Stochastic %K line fell below the %D line, after touching 100%, suggesting that the short term movement of the KLCI was over-heated. Nevertheless, provided that the Stochastic is still above 70%, the short term bullish signal shall remains intact.

In conclusion, it is normal to have some correction after the KLCI has rallied for 7 days, and the performance of major stock markets is also a catalyst of the KLCI. Technically, with the KLCI still above the Bollinger Middle Band as well as the 14, 21, 31 EMA, the immediate technical outlook is still on the positive side.

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