As indicated by A, the KLCI lost 34.88 points with a gap, as affected by the negative performance across the regional markets. Support for the KLCI is now at the 900 psychological level followed by 883 WinChart Automatic Fibonacci Retracement while the resistance is at the 970 level.

As shown on the chart, the Bollinger Bands Width expanded 39% with the KLCI below the Bollinger Middle Band, therefore, the Bollinger Bands is still suggesting a negative movement for the KLCI. The negative movement of the KLCI is expected to continue until the Bollinger Bands Width should start to contract again.

As indicated by B, total market volume increased 50%, suggesting some increased of selling pressure as sellers are selling without asking for premium. However, there were some bargain buying as well. Therefore, if the KLCI should rebound from this point, the higher volume on Friday would form a good support for the KLCI.

As circled at C, the Stochastic break below 10% level, suggesting an over-sold signal for the KLCI. This shows that the KLCI short term movement is indeed bearish, but it is likely to trigger a technical rebound. If the Stochastic should break above the 30% level, it would be a signal suggesting a beginning of a technical rebound.

Generally, the volatility of the KLCI has increased, and it actually attracts some speculative trading. However, the longer term market movement remains weak.

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