On Friday, the KLCI opened gap down, and loss 7.62 points to close at 1339.30 points. Support for the KLCI is at 1334 followed by 1320 WinChart Automatic Fibonacci Retracement, resistance is at 1350 to 1354 WinChart Automatic Fibonacci Retracement.

As indicated by A, the KLCI tested the Bollinger Middle Band, while managed to stay at the Bollinger Middle Band level. Meanwhile, the Bollinger Bands contracted 2%, suggesting that the KLCI is still trendless.

As indicated by B, total market volume declined 24%, with volume staying below 40-day VMA level. Therefore, this shows that the overall market is still very quiet, thus implying that investors' confidence is relatively low.

As circled at C, the Stochastic touched 70% level. If the Stochastic should break below 70%, it would be a signal suggesting a beginning of a technical correction, or the short term movement of the KLCI is expected to be weakening.

In conclusion, external market performance is pulling down the KLCI. But since the KLCI is still staying at the Bollinger Middle Band, it has not formed a downtrend yet. In short, the KLCI is expected to consolidate until the re-expansion of the Bollinger Bands.

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