The KLCI opened with a gap down on Wednesday, after the huge decline in major indices across the US and European markets. The KLCI opened at 1330.53 points, and had its intra-day low reaching 1324.34 points. However, the KLCI managed to regaining some lost ground at the close, by losing only 6.55 points or 0.5%. Therefore, the KLCI has fallen below the 1334 level, and the 1334 is now serving as the immediate resistance level, while the support is at 1318.53 WinChart Automatic Fibonacci Retracement.

As indicated by A, the KLCI also broke below the Bollinger Middle Band, and the immediate technical outlook is now bearish biased. Fortunately, the Bollinger Bands only expanded 2%, suggesting that the downside volatility is not extreme. Nevertheless, if the Bollinger Bands should continue to expand with the KLCI below the Bollinger Middle Band, more downside movement is expected for the KLCI.

As indicated by B, total market volume fell and stay below the 40-day VMA level, suggesting that the overall market participation is relatively low, and therefore, without sufficient market participation, the KLCI is less likely to pickup any strength.

As indicated by C, the Stochastic fell below 70% level, ended the short term bullish signal. Technically, the Stochastic has to return to above 70% in order for the KLCI to resume its short term bullishness.

In conclusion, since the Bollinger Bands has not really started expanding, the direction for the KLCI remains unclear. Nevertheless, with the KLCI below the Bollinger Middle Band, the immediate technical outlook is still on the negative side.

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