As indicated by A, the FBM KLCI ended 11.31 points or 0.9% lower on Monday, to close at 1255.66 points. Currently, the KLCI is testing the 1257 WinChart Automatic Fibonacci Retracement, and if the KLCI should break below this level, the next support for the KLCI will be at 1237 or 38.2% retracement line. Resistance for the KLCI remains at 1288 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded only 2%, with the KLCI below the Bollinger Middle Band. Since the KLCI is now below the Bollinger Middle Band, the immediate outlook for the KLCI is now on the negative side.

As indicated by B, total market volume declined 31%, while volume is still further below the 40-day VMA level. This shows that the overall market sentiment is still weak, as participation of investors is low. It is important to note that if the KLCI should break above any resistance, volume above the 40-day VMA level is an important confirmation. However, during a decline, volume does not have to be above the 40-day VMA level to confirm a downtrend. If volume should increased substantially during a decline, it would be a signal suggesting an increased of selling pressure.

As circled at C, the Stochastic breaks below 30% level, and re-entered the short term bearish region. If the Stochastic should remain below 30% level, the market movement for the short term shall remains bearish biased.

In conclusion, the KLCI is still under consolidation, while the market is still lack of fresh leads. Nevertheless, if the Bollinger Bands should continue to expand with the KLCI below the Bollinger Middle Band, more downside movement is expected for the KLCI.

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