On Tuesday, the KLCI had its intra-day high reaching 1370.52, but profit taking caused the KLCI to give up most of its gain, and closing at 1363.83 points, gaining only 0.23 of a point. Resistance for the KLCI is at 1400 psychological level while the support is at 1354 WinChart Automatic Fibonacci Retracement.

As shown on the chart above,the Bollinger Bands contracted 4%, suggesting that the volatility of the KLCI is gradually declining, thus a sign of a consolidating market. Nevertheless, the Bollinger Middle Band is still the dynamic support for the KLCI.

As indicated by B, total market volume stays firmly above the Bollinger Middle Band, with the KLCI touching its new high since 28th of February, 2008. This suggests that the market is actively participated, thus the market sentiment is expected remains positive for the moment.

As indicated by C, the Stochastic stays above 70%, in the short term bullish territory, thus the short term bullishness of the KLCI remains intact. If the Stochastic should break below 70%, it would be a signal suggesting a beginning of a technical correction.

In conclusion, the KLCI uptrend remains intact, but under going an profit taking stage. Nevertheless, with the KLCI still above the 14, 21, 31 EMA, the technical outlook shall stay positive.

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