As indicated by A, the KLCI was dragged down by heavy weighted KLCI component stocks on Tuesday, and broke below the Bollinger Middle Band, 1140 WinChart Automatic Fibonacci Retracement, as well as the T1 downtrend line. Therefore, the KLCI lost its support, and in other words, if the KLCI failed to return to above the T1 in the near term, the risk of it resume its downtrend would be higher.

From a technical point of view, if the KLCI should rebound at the 1089 level, it could form a double bottom pattern, which would suggests an temporary stop to the downtrend. Nevertheless, since the KLCI is now below the Bollinger Middle Band, the immediate outlook for the KLCI is cautiously bearish biased. If the Bollinger Bands Width should expands with the KLCI below the Bollinger Middle Band, it would be a bearish signal, suggesting more downside movement for the KLCI.

As indicated by B, total market volume increased 41.2%, despite the KLCI losing 1.7%. The increase of volume suggests some selling pressure, also suggests some bargain hunting activities. In short, if the buying interest should absorb the selling pressure, the KLCI would consolidate, or else, the KLCI would have more downside risk.

As circled at C, the MACD histogram is still falling while showing the rounding top pattern, therefore, suggesting a weakening movement for the KLCI, thus a technical correction. The weakening of the KLCI is expected to continue until the MACD histogram should form a rounding bottom.

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