As indicated by A, the KLCI continued to rebound on Monday, gaining 16.07 points or 1.08%. However, the KLCI stopped rising precisely at 1500, and this suggests that the immediate resistance is still at 1500. Meanwhile, the 14, 21, 31 EMA is still serving as the dynamic resistance. Support for the KLCI is at 1480.

As indicated by B, despite the KLCI rebounding more than 1%, total market volume fell 11.37%. This suggests that the KLCI was merely having its technical rebound, and not much inflow of fresh capital. Also, this does not reflect any sign of improvement of market sentiment.

As indicated by C, the Stochastic continue rising, breaking above 50%, and this suggests some improvement in the short term movement of the KLCI. If the Stochastic should break above 70%, it would be a short term positive signal for the KLCI.

In conclusion, after the heavy selling down last week, the rebound of the KLCI is rather normal. However, with the KLCI still below the 14, 21, 31 EMA, the technical outlook for the KLCI is still weak. Meanwhile, investors are advised not to mistaken technical rebound as a reversal. In fact, if the KLCI should be resisted by the dynamic resistance, and begin falling again, it would be forming another lower-high, which is one of the sign of weakness.

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