As the news of the US government agreeing on avoiding default, the Asian markets edged up higher, while the futures of the European and the US market gains. As shown on the chart above, the KLCI rebounded 9.2 points or 0.59% on Monday, closing at 1558.01 points. Since the KLCI is rebounding from the 1540 level, we shall set the support for the KLCI temporary at 1540 level, as indicated by A. However, with the KLCI still below the 14, 21, 31 EMA, the technical outlook for the KLCI remains weak.

Despite gaining 9.2 points of the KLCI, total market volume fell 8.93%, but still above the hold above the 40-day volume moving average. This suggests that the market is slightly well-participate, and generally, if volume should continue to increase while stay above the 40-day volume moving average, it is likely to help lifting the market sentiment.

As indicated by C, the Stochastic breaks above 30%, leaving the short term bearish territory, and it triggers a short term technical rebound signal. However, this does not mean that the KLCI is reversing or resuming its uptrend right away.

In conclusion, after falling for many days in the previous weeks, a rebound is rather normal, but not yet suggesting that the KLCI would resume its uptrend immediately, for the KLCI is still resisted by the 14, 21, 31 EMA dynamic resistance. Therefore, the immediate technical outlook for the KLCI remains weak.

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