As indicated by A, the FBM KLCI tested the Bollinger Middle Band dynamic resistance, while the Bollinger Middle Band is also overlapping the 1287 WinChart Automatic Fibonacci Retracement, thus a stronger resistance line. Therefore, the 1287 WinChart Automatic Fibonacci Retracement is still a resistance for the KLCI while the support is at 1272 followed by 1254 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 11%, suggesting that the KLCI is consolidating. However, unless the KLCI could break above the Bollinger Middle Band, or the technical outlook remains weak.

As indicated by B, total market volume declined 14.1%, with volume below the 40-day VMA level. This shows that the market is still lightly participated, and also investors confidence is low. Therefore, without sufficient market participation, the KLCI, or the market is less likely to pickup its strength.

As indicated by C, the Stochastic has not broken above 50%, suggesting that the short term movement of the KLCI failed to pick up strength. Technically, the Stochastic has to break above 70%, in order to signal a short term bullish movement.

In conclusion, with the KLCI resisted by the Bollinger Middle Band, it shows that the rebound recently was merely a technical rebound, while the downtrend remains intact.

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