As indicated by A, the KLCI retreated 12.56 points, closing the Continuous Gap on Friday, this is a signal suggesting a beginning of a technical correction. Resistance for the KLCI is still at 993 WinChart Automatic Fibonacci Retracement and the 1000 mark, while the support is still at 972 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted 7%, suggesting that the KLCI is still in a consolidation or technical correction stage. Nevertheless, the Bollinger Middle Band and the T1 line are still the dynamic support for the KLCI.

As indicated by B, total market volume increased 1.4%, with volume still higher above the 40-day VMA level. Since the KLCI ended lower on Monday, the increased of volume suggests that the KLCI resistance at 993 and the 1000 level is relatively stronger. Nevertheless, with volume still above the 40-day VMA level, the market is still well-participated.

As circled at C, the Stochastic breaks below 90% after touching 100%, which is a signal suggesting a beginning of a technical correction. Since the Stochastic is basically still above 70%, the short term movement of the KLCI has not turned bearish yet.

The KLCI has its relatively biggest technical correction in recently weeks, this is because that the KLCI has been staying in over-bought condition for quiet sometimes. Nevertheless, the contraction of the Bollinger Bands Width is also suggesting that the KLCI is preparing for a new movement, and the new movement shall only be revealed when the Bollinger Bands Width re-expands.

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