As indicated by A, the KLCI tested the 13-day EMA on Friday, but failed to break out. This suggests that despite the strong rebound, the KLCI failed to break away from this downtrend.

Meanwhile, the Bollinger Bands contracted 40%, suggesting that the KLCI is indeed consolidating, while preparing for a new movement. The direction of the new movement shall be revealed once the Bollinger Bands re-expands.

As indicated by B, total market volume fell 31.6%, with volume further below the 40-day VMA level. This shows that the market is indeed quiet. When the market volume is low, we assume that the buying interests is low, thus insufficient to off set the selling pressure.

As indicated by C, the MACD histogram might be forming a Rounding Top, thus implying that the short term movement of the KLCI could be losing strength. If the MACD histogram should continue falling, the KLCI is expected to weakening, and the weakening short term movement is likely to carry on until the MACD histogram should form a Rounding Bottom.

In conclusion, the KLCI failed to break out from its downtrend, as it is still resisted by the 14, 21, 31 EMA. Meanwhile, the resistance for the KLCI is still at 1297 to 1300 psychological level while the support remains at 1284, which is the 38.2% Fibonacci Retracement line.

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