As indicated by A, the KLCI gained by last minute rally, breaking marginally above the 1566 level, to close at 1567.35 points. Since the KLCI is only marginally above the 1566, the break out is not yet valid. Nevertheless, next resistance for the KLCI is at 1576.95 historical new high level; while the supports are at 14, 21, 31 EMA followed by the L1 line.

As indicated by B, total market volume failed to increase, despite the last minute gain of the KLCI. This suggests that investors are still being cautious, and not feeling confident about the local market. By right, if the KLCI should rally with thin volume, the rally is less likely to be sustainable.

As indicated by C, the Stochastic stays above 70%, in the short term bullish territory. This suggests that the short term movement of the KLCI is still positive, until the Stochastic should break below 70%.

In conclusion, in spite of the low market participation, the technical outlook for the KLCI remains positive. The KLCI is set to test its 1576.95 new high, but to resume the uptrend which started in 2009, more market volume is needed, and more importantly, no more negative performance of the regional markets.

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