As displayed on the chart above, the Composite Index has been support by the L1 line for the 5 consecutive days now; coupled with the contraction of the 10 days Bollinger Bands, KLCI is indeed consolidating. Although KLCI attempted to go higher in the morning session, it was precisely resisted by the 10 days Bollinger middle band. Therefore it shows that the middle band is now serving as a dynamic resistance for KLCI. On the other hand, the 50 days EMA is still serving as the dynamic support for KLCI. (Study A)

Total market volume on Tuesday stood at 4.31 million lots, a 29% increase of volume. Although the total market volume failed to reach the 40 days VMA level, it is relatively closed to it now. If the KLCI were going to break above the Bollinger Middle Band with volume standing above the 40 days VMA, we shall see more positive movement for KLCI. But, in reverse, if the see a break out below the L1 support with volume higher than the 40 days VMA, it would suggests some strong selling pressure, thus market is expected to move lower. (Study B)

In line with the consolidation, MACD histogram continues its round bottom signal. If we see the MACD histogram continue to move higher, this consolidation shall continue or even a chance for KLCI to turn stronger. However, if we see a round top signal from the histogram, that would suggests an end to the consolidation and the down fall of KLCI would likely to continue. (Study C)

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