As stock markets across the globe were mostly lower, the KLCI opened lower with a gap on Monday, but the KLCI pullback, closing only 1.47 points lower. Support for the KLCI is still at 1220 WinChart Automatic Fibonacci Retracement, while the resistance is at 1248 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 14%, while the KLCI is still below the Bollinger Middle Band, and therefore, the bearish biased movement for the KLCI is still intact, until the Bollinger Bands contracts.

As indicated by B, total market volume increased 7.5%, with volume still firmly above the 40-day VMA level. This shows that the market is still widely participated, which is a positive element that would help sustaining the positive market sentiment. However, as the KLCI ended almost flat, the relatively high volume on Monday implies an increase of conflict between some bullish buyers and bearish sellers.

As indicated by C, the Stochastic %K line is about to cross above the %D line. If the %K line should cross above the %D line and then breaking above 30% level, it would be a signal suggesting an end to the short term bearish movement, and the KLCI is likely to rebound.

In conclusion, with the KLCI still below the Bollinger Middle Band, the immediate outlook is still on the negative side. If the Bollinger Bands should continue to expand, more downside risk for the KLCI is expected. On the other hand, the Stochastic is about to break above 30% level, and the KLCI might have a chance for a technical rebound. If the Stochastic should also break above 70% level, then only the KLCI would have a chance to regain its strength.

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