On Wednesday, the KLCI ended 4.26 points lower as drag by the negative performance of the Dow Jones and regional markets. As indicated by A, the KLCI is now precisely supported at the Bollinger Middle Band, which is the dynamic support for the KLCI. Resistance for the KLCI is still at 940 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width contracted 14%, suggesting the KLCI is still in its consolidation stage, and the market direction is still unclear.

As indicated by B, total market volume declined 33%, but volume is still above the 40-day VMA level. Generally, the overall market participation is still healthy. However, if the KLCI should continue its sideways consolidation, a decline of volume is usually normal.

As circled at C, the Stochastic breaks below 70% level, suggesting an end to the short term bullish movement. If the Stochastic should failed to return to above 70% level, the short term movement for the KLCI is likely to turn weak.

In short, the KLCI is consolidating now, thus the short term bullish movement has ended. At the moment, we are still waiting for the Bollinger Bands Width expansion signal, which would mark a beginning of a new movement, and we shall be able to determine the new direction for the KLCI with its position above or below the Bollinger Middle Band when the Bollinger Bands Width re-expands.

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