On Tuesday, the KLCI had its intra-day low touching 1224.37 points, but it managed to rebound in the afternoon session, and as a result, the KLCI only ended 1.36 points lower, to close at 1233.86 points. As shown on the chart above, the 1233.45 WinChart Automatic Fibonacci Retracement is still the support for the KLCI while the next support is at 1200 level, resistance is at 1250 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands contracted 4%, suggesting that the KLCI is likely to have a consolidation, or a chance of a technical rebound, and the Bollinger Middle Band shall be the first target of the rebound. In other words, the KLCI has to break above the Bollinger Middle Band in order to break away from the short term bearish movement.

As indicated by B, total market volume increased 0.6%, and therefore, total market volume is still below the 40-day VMA level. This suggests that the overall market participation is still insufficient, which is typical of a consolidating market.

As indicated by C, the Stochastic rebounded from the 0% level, after being over-sold. If the Stochastic should break above 30% level, it would be a signal suggesting a beginning of a technical rebound for the KLCI.

In conclusion, the KLCI is supported by the 1233.45 WinChart Automatic Fibonacci Retracement, and if the KLCI should stay above this level, it is likely to consolidate. However, despite the chance of a technical rebound, it is still staying below the Bollinger Middle Band, thus the immediate outlook for the KLCI is still bearish biased.

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