As shown on the chart above, the KLCI breaks below the 200-day Moving Average line, suggesting that the KLCI is entering a bearish market. The KLCI fell 23.56 points to close at 1250.13 points. As indicated by A, the KLCI also break below 1254 WinChart Automatic Fibonacci Retracement, and therefore, this is the current resistance for the KLCI while the next support is seen at 1224 WinChart Automatic Fibonacci Retracement.

The Bollinger Bands expanded 31%, with the KLCI remains below the Bollinger Middle Band, thus the technical outlook remains bearish biased. Generally, the bearish biased technical outlook shall carry on until the Bollinger Bands should contract.

As indicated by B, total market volume increased 42%, despite the KLCI is falling, this suggests some bargain buying, but sellers are selling at lower price, thus implying some increased of selling pressure, thus further dampen the KLCI sentiment.

As indicated by C, the Stochastic breaks below 10%, suggesting that the KLCI short term movement is indeed weak, but now it is getting over-sold again, and therefore, there is a chance of a technical rebound in the near term, but still, the Stochastic has to break above 30%, in order to signal a technical rebound.

In conclusion, since breaking below the L2 line, the KLCI has fallen 6 days, and even breaking below 200-day MA. If the KLCI should fail to return to above 200-day MA, the risk of entering a bear market would be higher.

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