On Monday, the KLCI opened gap down at 1614.35 points, which is 9.35 points lower than Friday's closing. Soon, heavy selling pushed the KLCI below the critical 1600 level, touching its daily low of 1595.85 points. Fortunately, the KLCI rebounded quickly, regaining most of its lost ground, before closing the day at 1612.38 points, losing 11.32 points or 0.70%. As indicated by A, support for the KLCI remains at 1600 while the resistance is at 1625 as well as the 14, 21, 31 EMA dynamic resistance.

As indicated by B, total market volume fell 23.08 %, with volume below the 40-day Volume Moving Average. In short, this shows that investors are still being very cautious while not actively taking up new positions.

As indicated by C, the Stochastic is not yet breaking below 30%, thus it is showing a short-term neutral signal, however, with some weakening biased. Technically, if the Stochastic should break below 30%, it would be a short-term bearish signal for the KLCI.

In conclusion, the KLCI tested the 1600 level again, and with the rebound lifting the KLCI away from the 1600, the KLCI is avoiding a downtrend formation once again. Nevertheless, profit taking remains strong across the board as we see losers still outnumbered gainers 571 to 183. This is dampening investors' confidence and causing the market to stay at a cautious mood.