The KLCI loss 11.85 points to close at 1323.44 points, breaking below the 1325 WinChart Automatic Fibonacci Retracement. Therefore, the 1325 WinChart Automatic Fibonacci Retracement is the current resistance level for the KLCI, as indicated by A. Support is at 1309 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands only expanded 4%, suggesting a possible technical correction. If the Bollinger Bands should contract, the target of the technical correction for the KLCI would be a the Bollinger Middle Band, which is also a dynamic support for the KLCI.

As indicated by B, total market volume declined 27%, with volume below the 40-day VMA level. This suggests that the market is relatively quiet on Tuesday, but it also implies that the selling pressure on Tuesday was rather mild. Nevertheless, volume has to be above the 40-day VMA level in order to sustain the recently rally of the KLCI.

As indicated by C, the Stochastic retreated after hitting 100%, as a sign of over-heated condition. However, as long as the Stochastic is above 70% level, the market movement for the short term is still bullish biased.

After rising sharply for 2 days, the KLCI was over-heated, and as a result, a pull back took place. Technically, provided that the KLCI could remain above the Bollinger Middle Band, or the 14, 21, 31 EMA, the technical outlook shall remains positive.

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