On Thursday, the KLCI rose another 16.37 points or 1.15%, to close at 1444.87 points. As indicated by A, the KLCI is testing its resistance at 1453 points, which is the 50% Fibonacci Retracement line (Based on the high of 1597.08 and the low of 1310.53 points). Support for the KLCI is temporary at 1400.

As indicated by B, total market volume increased 39.67%, with volume sharply above the 40-day volume moving average. This suggests an increased of capital inflow, as new buyers are above to off set the selling pressure of profit takings. Generally, 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. However, the Stochastic has been staying above 90%, for a few days, thus suggesting that the short term movement is getting over-heated, and a pull back is likely to take place in the near future.

In conclusion, the KLCI broke above the 1400 as well as the 14, 21, 31 EMA dynamic resistance, thus temporary breaking away from its downtrend. However, this does not mean that the KLCI would form an uptrend immediately. Not only it has formed higher-lows, and breaking the next resistance. For the moment, it is still too soon for the 14, 21, 31 EMA to be serving as the dynamic support for the KLCI.

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