The KLCI continued falling on Friday, to close at 1296.6 points, breaking below the 1300 mark. Support for the KLCI is now at 1292.33 points which is the 38.2% Fibonacci Retracement line, while the resistance is at 1334.34 WinChart Automatic Fibonacci Retracement.

As indicated by A, the KLCI is now testing the 21-day EMA, which serves as a dynamic support. Technically, the 14, 21, 31 EMA is still serving as the dynamic support, thus the KLCI has not formed a downtrend yet, unless the KLCI should break below this dynamic support.

As indicated by B, total market volume declined 15.1%, with volume below the 40-day VMA level. This clearly shows that the market is really quiet, as investor confidence is still low. Therefore, the KLCI is less likely to pick up any strength.

As indicated by C, is still falling below 30% level, suggesting that the short term movement for the KLCI is now bearish. With the Stochastic touching 10%, it suggests that the KLCI short term is about to be over-sold, thus a chance of a technical rebound is expected. However, despite a chance of a rebound, the short term bearish signal shall remain intact if the Stochastic should remain below 30% level.

In conclusion, the immediate technical outlook for the KLCI is still weak, but it is still supported by the 14, 21, 31 EMA, thus it has not formed a downtrend yet. If the KLCI should remains supported by the 14, 21 ,31 EMA, the KLCI would prolong its consolidation

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