After massive sell down of the KLCI for the past few days, the KLCI short-term is seriously over-sold, thus the current technical rebound is only normal. The KLCI rebounded 8.38 points to close at 1480.52 points, as indicated by A. Since the KLCI had fallen below a few major support, including 1540 gap, and 1500 psychological support, the 1500 is now the immediate resistance for the KLCI.

Meanwhile, although the KLCI has fallen below the 1474 level on Tuesday, it managed to rebound back to above 1474. Please note that the 1474 was the low of the year 2011, and with the KLCI back to above 1474 now, the current support is at 1474~1480. Also, based on the theory of Fibonacci retracement, by using the low of 2009, 836 points, and the high of 2011, 1597 points, the 1417 level is the 23.6% retracement level. And the next important level will be at around 1300, which is the 38.2 retracement level.

As indicated by B, total market volume remains above the 40-day volume moving average. Although it means that the market is actively participated, it does not necessary mean that investors are feeling more confident. In fact, the high volume are mostly from short term trading and profit taking activities.

As indicated by C, the Stochastic rebounded slightly, breaking away from its short term bearish territory. However, technically, the Stochastic would have to break above 70%, in order to show a short term bullish signal.

In conclusion, the Technical rebound for the KLCI is in place right now, but technical outlook remains weak. This is because that the KLCI is still staying below the 14, 21, 31 EMA dynamic resistance.

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