On Tuesday, the KLCI opened gap down, tested the 800 psychological level before rebound to close at 832.44 points. As mentioned earlier, the 800 points level is the target level for the Head and Shoulder Top pattern, and therefore, the 800 mark is an important level for the KLCI.

As indicated by A, the KLCI formed a long lower shadow candlestick (Hammer), which suggests a chance of a technical rebound for the KLCI. Support for the KLCI is at 800 points while the resistance is at 887 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width expanded another 30%, with the KLCI below the Bollinger Middle Band, and therefore, suggesting the immediate outlook is still bearish biased. Generally, the bearish movement is expected to continue unless the Bollinger Bands Width should begin to contract.

As indicated by B, total market volume declined 5.3%, but still above the 40-day VMA level. This shows that the overall market participation is relatively active. If the KLCI should rebound with higher volume, it would be a positive sign. However, if the KLCI should continue to fall with high volume, it would be a sign of increasing selling pressure.

As circled at C, the Stochastic is still below 30%, suggesting the short term movement for the KLCI is still bearish biased, and the bearish biased movement is expected to continue unless the Stochastic should break above 30% level.

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