As indicated by A, the FBM KLCI fell below the 1250 WinChart Automatic Fibonacci Retracement, and continued its decline. Support for the KLCI is now at 1233.45 WinChart Automatic Fibonacci Retracement, which is the support for the 2nd of November, 2009; next support for the KLCI is at 1200 psychological level, while the resistance is at 1250 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the KLCI is still below the Bollinger Middle Band, which suggests that the immediate outlook for the KLCI is still on the negative side. Unless, the KLCI could break above the Bollinger Middle Band, the bearish biased movement of the KLCI is expected to carry on. On the other hand, if the Bollinger Bands should begin to contract, the KLCI would be consolidating.

As indicated by B, total market volume declined 16.2%, and as a result, volume is still below the 40-day VMA level, suggesting that the overall market participation is still quiet. Therefore, technically, with volume below the 40-day VMA level, the KLCI is less likely to pick up any strength.

As indicated by C, the Stochastic is touching zero again, suggesting that the short term movement of the KLCI is indeed very bearish, but it has gone over-sold. Therefore, a slight rebound is expected to take place. However, if the Stochastic should stay below 30% level, the market movement for the short term is still expected to be weak.

Generally, the KLCI short term movement is expected to be weak, until the Stochastic could break above 30% level. Meanwhile, the performance of the KLCI is highly sensitive to the performance of the major markets abroad.

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