As indicated by A, the KLCI ended lower as more selling from selected blue chip counters. Support for the KLCI is now at 1120 WinChart Automatic Fibonacci Retracement and the resistance is seen at 1164 Fibonacci Retracement line. As shown on the chart above, the T2 line is now the immediate dynamic resistance for the KLCI.

From a longer term point of view, since the KLCI has broken below the 200-day Moving Average line, and also the KLCI has fallen more than 20% from its peak at 1524.69 points, therefore, these are the sign of a bear market. In other words, any rally at this moment would be considered as a technical rebound; unless the KLCI should break above the 200-day Moving Average or the reduce the loss to less than 20% from its peak.

As indicated by B, total market volume declined 30.5% on Monday, which suggests that there is no follow through of Friday's high volume. Therefore, if the market volume should continue staying below the 40-day VMA level, the KLCI is likely to move sideways or negative biased.

As circled at C, the Stochastic is still staying below the 305 level, and therefore, the KLCI short term movement shall remains bearish biased. In short, there are more downside room if the Stochastic should remain below the 30% level.

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