Malaysia’s benchmark stock index has formed a “dead cross” pattern, a bearish indicator that signals further losses for the market.

The FTSE Bursa Malaysia KLCI Index dropped 0.3 percent to 1,304.16 yesterday, sliding for a fifth day, the longest losing streak since a six-day decline through Jan. 29. The 10-day moving average fell below the 40-day moving average for the first time since Feb. 4, creating the dead cross, Khoo Ban Yu, RHB’s technical chartist, said in an interview. A short-term moving average falling below a longer-term one points to a market retreat.

Malaysian stocks have fallen over the past week on growing concern Europe’s debt crisis will threaten the global recovery and signs China’s property market clampdown curbed transactions.

The KLCI is only the latest market to exhibit a bearish signal. The Shanghai Composite had a similar technical indicator earlier in the month. With weak jobs figures coming out from the US this is a trend that is likely to continue across the summer.

A drop for the index below 1,300 may result in a further retracement towards the next support levels of around 1,250 and 1,200.