The KLCI ended lower on Monday as lead by the weakening regional markets. The KLCI loss 6.1 points to close at 1326.67 points. Support for the KLCI is at 1318.53 WinChart Automatic Fibonacci Retracement while the resistance is at 1334 followed by 1347.6 points.

As shown on the chart above, the Bollinger Bands expanded 26%, with the KLCI below the Bollinger Middle Band, and therefore, the immediate technical outlook for the KLCI is now bearish. The negative signal shall remain intact, until the Bollinger Bands expansion rate shall reduced or the KLCI breaking above the Bollinger Middle Band.

As indicated by B, total market volume increased 3.7%, but still below the 40-day VMA level. This shows that the market is relatively quiet as investors choose to shun the market correction. With the volume below the 40-day VMA level, the KLCI is not likely to pick up any strength, thus the correction mode is likely to carry on.

As indicated by C, the stochastic rebounded slightly near 10%, but remain below 30%. Therefore, the short term bearish signal remains intact.

In conclusion, with the KLCI below the Bollinger Middle Band, together with the Bollinger Bands re-expanding, the immediate technical picture of the KLCI is bearish biased.

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