On Monday, the KLCI opened lower but soon picking up its strength as lifted by blue chips. The KLCI closed at 1554.94 points, gaining 3.82 points or 0.25%. As indicated by A, the KLCI is now testing the 14, 21, 31 EMA dynamic resistance. Next resistance for the KLCI is at 1566-1570 while the supports are at 1535 followed by 1500.

As indicated by B, total market volume remains below the 40-day Volume Moving Average, and this does not go in line with the short-term improvement of the KLCI. In short, the market is less likely to regain its strength or sustain its improvement without sufficient inflow of fresh capital.

As circled at C, the MACD histogram is still rising, thus the Rounding Bottom signal remains intact. This suggests that the KLCI is picking up some strength in the short-term.

In conclusion, despite the short-term improvement, the KLCI is only having its technical rebound in its downtrend, while the technical outlook remains at negative. In order for the KLCI to break away from this downtrend, it would have to form higher-lows and break above its recent resistance, which is the 1566-1570. On the other hand, if the KLCI should form lower-highs, and then breaking below 1535 support, it would be extending its downtrend.