On Monday, the KLCI declined 16.09 points, to close at 869.34 points. As indicated by A, the KLCI rebounded precisely at the Bollinger Middle Band, before closing at 869.34 points, this suggests that the Bollinger Middle Band is still the dynamic support for the KLCI.

As shown on the chart above, the Bollinger Bands Width contracted 5%, suggesting the KLCI is now having its technical correction. Since the 869 WinChart Automatic Fibonacci Retracement is very closed to the Bollinger Middle Band, it will be a support for the KLCI for now, while the resistance is at 885 WinChart Automatic Fibonacci Retracement.

As indicated by B, total market volume declined 20.1%, despite the KLCI falling over 16 points. This shows that the market is no sign of panic selling, only an abrupt technical correction. Nevertheless, from the technical point of view, a lower volume during a technical correction or a consolidation of the KLCI is considered normal, as investors choose to stay on the sidelines amid the market uncertainty.

As circled at C, the Stochastic breaks below 70%, suggesting a beginning of a technical correction. If the Stochastic should also break below 30% level, it would be a signal suggesting a weakening short term movement for the KLCI.

Despite the sharp correction of the KLCI on Monday, the contraction of the Bollinger Bands Width is also suggesting that the KLCI is now gearing up for a new movement. If the Bollinger Bands Width should continue to contract, the correction of the KLCI is expected to continue.

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