As the Asian markets closing lower, the KLCI also ended flat on Thursday. As indicated by A, the KLCI remains in its narrow daily trading range, while still supported by the Bollinger Middle Band. Other than the Bollinger Middle Band, the 1064 WinChart Automatic Fibonacci Retracement is also the support for the KLCI. Resistance for the KLCI are seen at 1100 psychological level and the 1120 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted 3%, suggesting that the KLCI is still consolidating while preparing for a new movement. Generally, the direction for the KLCI will be clearer when the Bollinger Bands Width re-expands, and the direction for the KLCI would then be determined by the position of the Bollinger Middle Band. Generally, if the KLCI should stay above the Bollinger Middle Band when the Bollinger Bands Width expands, it is a bullish signal.

As indicated by b, total market volume declined 13%, and therefore, the volume is still below the 40-day VMA level. However, this is rather normal when the KLCI is consolidating.

As indicated by C, the MACD histogram formed a rounding top despite staying above the zero level, therefore, this suggests a short term weakness for the KLCI, which could means a technical correction for the KLCI in the near term.

In short, the KLCI direction is still unclear as it is gearing up for a new movement, therefore, it pays to monitor the Bollinger Bands Width for now.

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