On Wednesday, the KLCI ended another day mixed with a narrow daily range. As shown on the chart above, the KLCI remained in the range of the 1332 resistance and the 1285 support. Currently, the KLCI is still consolidating. This can be seen in the contraction of the Bollinger Band width. As indicated by A, the Bollinger Band width contract 5% on Wednesday. The consolidation of the KLCI is expected to continue until the expansion of the Bollinger Band width, which suggests an increase of fluctuation, thus a clearer market direction. (Study A)

Total market volume on Wednesday declined 3% while remains below the 40-day VMA level. This appears that investors are still on the sidelines in anticipating the shorter trading week due to public holidays. Therefore, with the market volume staying below the 40-day VMA level, the KLCI is likely to stay sideways. (Study B)

As circled at C, Stochastic remains in the neutral region (around 50% level). It is a good idea to monitor the Stochastic signal for if the KLCI should break out from the consolidation, Stochastic would be the first indicator to show such signal. (Above 70% will be the short term bullish region, and below 30% will be the short term bearish region.) (Study C)

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