As shown on the chart, the Bollinger Bands Width expanded 13% on Friday, with the KLCI below the Bollinger Middle Band, and therefore, the expansion of the Bollinger Bands Width suggests a continuation of the downside volatility, thus the KLCI ended 32.21 points or 3.6% lower, in line with the poor performance across the regional markets. Currently, the KLCI is heading for its target of 800 mark, which is the target level for its Head and Shoulder Top pattern, while the 900 mark is the resistance.

As indicated by A, the KLCI broke below the T2 line, suggesting the downtrend is speeding up; if the KLCI should not return to the downtrend channel, the steep downtrend movement is expected to continue.

As indicated by B, total market volume increased 55.2% on Friday. With the KLCI still falling, the increase of volume actually implies an increased of selling pressure.

As circled at C, the Stochastic breaks below 10%, which entered a short term over-sold region. This suggests that the current movement for the KLCI is indeed bearish, but has gone over-sold, thus a technical rebound is likely to take place in the near future. However, if the Stochastic should remain below 30% level, the market movement for the short term shall remain bearish biased.

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