Meanwhile, the Bollinger Bands is not yet expanding, and this suggests that the KLCI is basically still consolidating. However, with the KLCI forming a Lower-high, as illustrated by the dotted line, the KLCI is showing some weakness.

As indicated by B, total market volume fell 28.52%, with volume staying below the 40-day Volume Moving Average. This not only shows that the market participation is low, it also implies that investors are not confident at the local market, and therefore, with low inflow of fresh capital, the market in general is less likely to regain its strength.

As indicated by C, the Stochastic fell below 30%, entering the short term bearish territory. Technically, if the Stochastic should stay below 30%, the market movement for the short term is expected to weak.

In conclusion, since the KLCI is showing a formation a lower-high, the KLCI is expected to turn weaker, but not yet forming a downtrend. Technically, the KLCI would have to first form a lower-high, then breaking below its recent support, only then a downtrend would form. Nevertheless, the important support for the KLCI is at 1480~1500, which is the psychological support of the year 2011.

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