As indicated by A, the KLCI was precisely resisted at the Bollinger Middle Band, closing 2.44 points lower on Tuesday. This shows that the Bollinger Middle Band is still the dynamic resistance for the FBM2nd Board Index. Meanwhile, the KLCI has not broken above the 1037 WinChart Automatic Fibonacci Retracement. Support for the KLCI is still at 1000 psychological level followed by the 963 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted 13%, suggesting the the KLCI is still consolidating. Generally, when the Bollinger Bands Width is contracting, the market direction is usually unclear. Therefore, we have to wait till the Bollinger Bands Width re-expands to suggesting a beginning of a new movement, and the direction of the new movement would have to be determined by the position of the KLCI at the Bollinger Middle Band.

As indicated by B, total market volume declined 28.1%, and failed to maintain above the 40-day VMA level, suggesting the market participation has reduced. Therefore, the KLCI failed to sustain its short term rebound. Nevertheless, volume above the 40-day VMA level is crucial for the KLCI to regain its strength.

As circled at C, the Stochastic remain between 50% - 70% level, suggesting a short term rebound from the KLCI downtrend. Technically, the Stochastic would have to break and remain above 70% level in order to suggest a short term bullish signal.

In short, the the KLCI must have to break above the Bollinger Middle Band together with the Stochastic breaking above 70% level, or else the downtrend shall remain intact.

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