On Tuesday, the KLCI fell 5.09 points to close at 1334.52 points. As indicated by A, the KLCI is now touching the 1334 WinChart Automatic Fibonacci Retracement, which is the current support level. Resistance for the KLCI is seen at 1348 followed by the 1354 WinChart Automatic Fibonacci Retracement.

Meanwhile, the KLCI also tested the Bollinger Bands while the Bollinger Bands is still contracting, therefore, this suggests that the KLCI is still consolidating and the direction for the KLCI is still unclear.

As indicated by B, total market volume declined again, but still above the 40-day VMA level. Generally, it is normal to have lower volume during a correction or a consolidation as investors are being cautious.

As indicated by C, the Stochastic breaks below 70%, and therefore, suggesting that the short term movement is losing strength. However, due to the contraction of the Bollinger Bands, the significance of the Stochastic signal is reduced.

In conclusion, provided that the Stochastic has not dropped below 30%, the current decline of the KLCI is only a minor technical correction. As shown on the chart, the L1 remains at the resistance for the KLCI, and it is best that the KLCI to rebound and break above this level in order to make more upside room for the uptrend.

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