As indicated by A, the FBM KLCI retreated in the morning, but finding its support near 1400, the KLCI rebounded and ended the day at 1428.5 points, gaining 16.85 points or 1.19%. Next resistance for the KLCI is at 1450~ 1455 level, which is the 50% Fibonacci Retrancement level of the KLCI, from 1598 to the recent low of 1310.

As indicated by B, total market volume increased 1.77%, with volume above the 40-day volume moving average. Technically, if volume should remain above the 40-day volume moving average, the market sentiment is likely to improve.

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

In conclusion, after breaking above 1400, the KLCI also broke above the 14, 21, 31 EMA dynamic resistance by margin. Currently, it is still too soon for the 14, 21, 31 EMA to reverse its role as dynamic support to the KLCI, but if the KLCI should later form higher-lows, it would be a sign of the KLCI is regaining its strength, even a possible reversal signal. However, whether the KLCI would sustain its improvement, we will have to see if the market is supported by growing volume, and of course, more importantly, the performance of the US and the European markets still play a leading role leading our market.

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