On Tuesday, the KLCI rebounded 4.79 points as overall Asian markets ended higher. As indicated by A, the resistance for the KLCI is still at 887 WinChart Automatic Fibonacci Retracement while support remains at 800 WinChart Automatic Fibonacci Retracement. Since the 800 level is the target of the Head and Shoulders after breaking its neck line, it would be an important support level for the KLCI.

As shown on the chart, the Bollinger Bands Width contracted 10%, suggesting the KLCI fluctuation is getting lower, thus a signal suggesting a consolidation. But still, the KLCI would have to break above the Bollinger Middle Band in order to regain its positive position.

As indicated by B, total market volume declined 1.3%, with volume remain below the 40-day VMA level. Since the KLCI is consolidating, the lower volume is generally considered normal. However, if the KLCI should attempt to break above the 887 resistance or the Bollinger Middle Band dynamic resistance, more volume is needed to confirm its breakout.

After breaking below 10% level, the Stochastic rebounded as the short term movement of the KLCI was over-sold. But still, the Stochastic has to break above the 30% level successfully in order to break away from the short term bearish region.

Generally, the contraction of the Bollinger Bands Width has temporary paused the KLCI from falling futher. Still, the performance of the KLCI is highly affected by the performance of other major markets across the world. We shall continue to monitor the Bollinger Middle Band, as it would be the initial signal of any positive sign for the KLCI.

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