KLCI - Mild Correction then Inverted Head & Shoulders?

There has been some discussion on ChargingBull's blog about KLCI and a possible inverted H&S formation. Lets see what the chart shows.

Firstly the double bottom formed on 2 Dec & 15 June is now confirmed (X & Y). This is bullish for the CI and has been reflected in the rise up to current levels. Secondly, it has risen convincingly above the 200-day Moving Average & is staying above it. Thirdly it is also above the long term uptrend line (Z1-Z2) which goes back to year 2003. It is also above the 10, 21, 30 & 50 day MAV. Daily RSI & MACD are positive. Weekly RSI is flat but weekly MACD has not shown a positive crossover yet (the only negative indicators so far).

Are we also seeing the possibility of an Inverted Head & Shoulders pattern forming? S1 is the first part of the shoulder, Y is the head. If prices over the next few days fall slightly to around 920 & then rise again, then the second shoulder S2 will be confirmed. There is a good chance of this if the Z1-Z2 trendline & 200-day MAV hold up prices. The question is will it?

If this scenario happens & a breakout from the H&S happens, the measurement target is 980 which is the top of the upper long term trendline (T1-T2). Everything will then fall into place very nicely for Charting enthusiasts.

The possible dangers to this is the record oil price currently at US$ 76 a barrel & the falling Dow. If oil rises beyond $80 & the Dow falls below 10,500 convincingly then the CI will also fall & all bets are off.

For now I believe the CI will stay strong, the next few days are important to determine the H&S formation.