Main Chart:
As of last week's analysis, we mentioned about the weakness of KLCI with some bearish divergence signal, KLCI indeed fall back this week. However, there is no confirmation of the reversal yet, for the KLCI is still trending in the up trend channel with the dynamic support at T1 and the dynamic resistance at T2.

Mean while, by using the WinChart Automatic Fibonacci retracement, we could see that the immediate support for KLCI can be found at 931.45, which is also very closed to the T1 dynamic support level.

Bollinger Bands:
KLCI breached below the 10 days Bollinger Middle Band on Wednesday, and currently situated below the middle. Fortunately, we see a contraction of the Bollinger Bands, which suggests a consolidation for KLCI.

Volume:
Total market volume for the week stood at 19.47 million lots, a 31.7% decreased from last week's total volume. On the daily basis, total market volume for the entire week were below the 40 days VMA level. Therefore, the we can interpret that the market was rather quiet. (Study B)

MACD:
MACD triggered a 'sell' signal last Friday but KLCI had only lost a total of 6.37 points. This is due to the contraction of the Bollinger Bands. However, if we see the Bollinger Opens with a KLCI below the middle band, the 'sell' signal from MACD would be much stronger. Nevertheless, we shall monitor the histogram for the coming days and see if there is any 'round bottom' signal which would signify a technical rebound to compliment the T1 support as well as the 931 Fibonacci retracement. (Study C)

WinChart RSI:
WinChart RSI has been moving downward for the entire week and now located at around 47.8. This is the mid-term neutral zone (between 30 ?70) for it suggests that the market sentiment for the mid-term is still unclear. If the KLCI were going sideways, we shall see the RSI moving around the 50% region. (Study D)

Stochastic:
For this week, %K of Stochastic had dropped from 70% to 14%. Right now the %K is situated in the short-term bearish zone. Mean while, %D has also dropped to around 33% level, which almost gives a confirmation of the short-term bearish sentiment signal. Anyway, if the Stochastic were going to stay below the 30% level, we expect more downside movement for KLCI. (Study E)

Weekly DMI: (please refer to your weekly chart)
Switching to weekly chart, we see a sudden drop of the +DI line (green line). This shows that the KLCI is losing direction. For the coming weeks, we would have to monitor the development of the -DI (red line). If the -DI line is moving higher with the ADX going upward as well, it would suggests the bear is gaining control over the bull. Anyway, no confirmation of any major trend yet.

In the Nut Shell:
As mentioned in our last week's analysis, if the KLCI breaks below the 940 level it could suggests an end of the rally. Therefore, the market is now turning very cautious and we hope to see KLCI rebound at T1.

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