As indicated by A, the FBM KLCI retreated 3.74 points or 0.24% after breaking above the L1 line on Wednesday. Resistance for the KLCI remains at 1537.44 WinChart Automatic Fibonacci Retracement while the support is found at 1525.4 followed by 1513.36 WinChart Automatic Fibonacci Retracement.

Although the KLCI is above the 14, 21, 31 EMA, which usually suggests a positive technical outlook, the lost of gradient of the 14, 21 ,31 EMA is making the signal of the EMA less significant.

As indicated by B, total market volume fell 12.08%, and therefore, still below the 40-day Volume Moving Average. Again, this suggests that the market participation is low, and investors confidence is also low, and this means that the inflow of fresh capital is also, low.

As indicated by C, the Stochastic retreated slightly, but still above 70%, in the short term bullish territory. Technically, with Stochastic above 70%, the market movement for the short term is expected to be positive.

Although technical signal is suggesting a positive technical outlook, the volume volume is reducing the reliability of these signals. As mentioned yesterday, the break out above the L1 line, does not mean an immediate bullish reversal, but only suggests that the KLCI is not yet forming a downtrend.

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