Although the KLCI opened lower on Tuesday, as affected by the negative performance of the Dow Jones Industrial Average, it managed to regain most of the lost by closing only 2.68 points lower. Resistance for the KLCI remains at 887 WinChart Automatic Fibonacci Retracement while the support of 800 or 801 is still intact. (Study A)

As show on the chart, the Bollinger Bands Width expanded 0%, which suggests that the KLCI is likely to consolidate as the volatility of the KLCI does not increase. The contraction of the Bollinger Bands Width also implies that the KLCI is gearing up for a new movement, and the direction of the new movement shall be revealed once the Bollinger Bands Width re-expands.

As indicated by B, total market volume fell 2% on Tuesday, and therefore, the volume is still below the 40-day VMA level, suggesting the overall market is still lightly participated. But still, it is generally normal to have a relatively lower volume during the KLCI consolidation.

As circled at C, the MACD histogram has not formed a rounding bottom yet, which means that the KLCI is still moving on the weaker side, until the MACD histogram should tick up and form a rounding bottom.

In short, the T1 and T2 downtrend channel is still in place, which the KLCI is still trending down. Unless the KLCI could break away from the T1 downtrend line, the outlook for the KLCI is still bearish biased.

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