As the regional markets are improving, coupled with the expansion of the Bollinger Bands Width, the KLCI rose 29.84 points or 2.7%. As shown on the chart, the KLCI breaks above the Bollinger Middle Band dynamic resistance, suggesting that the KLCI is gaining strength.

Nevertheless, as indicted by A, the KLCI was precisely resisted by its first resistance, which is the 1140 points WinChart Automatic Fibonacci Retracement line (23.6% Retracement). If the KLCI could break above this level, the KLCI would have a “WinChart Bollinger Inversion Signal”, which means under a special condition where the Bollinger Bands Width does not contract and further expanding with the KLCI reverse its direction.

As indicated by B, total market volume surged 99.2%, and therefore, the total market volume breaks above the 40-day VMA level, suggesting an increase in market participation which suggests an increase of inflow of fresh capital into the market. If the volume should remain above the 40-day VMA level it would confirm the WinChart Bollinger Inversion signal, and the immediate outlook for the KLCI would improve. In other words, if the volume should decline again, the reversal would not be sustainable.

As circled at C, the Stochastic breaks above the 70% level, triggering a short term bullish signal. As long as the Stochastic is still above the 70% level, the short term bullish movement is expected to continue, until the Stochastic should break below the 70% level.

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