After a brief rebound, the KLCI started falling on Thursday, breaking below 1400 support, losing 31.23 points or 2.2%. The KLCI is making a 1 year plus new low, and it is the biggest daily fall since 9^th of August this year. As indicated by A, since the KLCI has broken below 1400, the next support for the KLCI is now at 1350. 1350 was the resistance for the KLCI from May 2010 to July 2010, and therefore, it is now serving as the next support for the KLCI. Meanwhile, the 14, 21, 31 EMA is still serving as the dynamic resistance to the KLCI downtrend.

As indicated by B, total market volume increased 23.45%, but volume still below the 40-day volume moving average. On one hand, this suggests that the overall market is still quiet. On the other hand, the increased of volume coupled with over 800 counters of losing, and the sharp fall, the increased of volume is actually implying a stronger selling pressure.

As indicated by C, the Stochastic remains below 30%, in the short term bearish territory. This suggests that the short term movement of the KLCI is still weak.

In conclusion, the KLCI is still forming lower-highs, and with it breaking new low right now, it clearly suggests that the downtrend is still intact, and as long as the KLCI is still staying below the 14, 21, 31 EMA, the negative technical outlook for the KLCI is expected to carry on.

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