As indicated by A, the KLCI broke above the Bollinger Middle Band by margin on Wednesday, as the Asian markets ended broadly higher. Breaking above the Bollinger Middle Band is crucial for the KLCI, and if the Bollinger Bands Width should re-expands with the KLCI above the Bollinger Middle Band, it would be a positive signal for the KLCI.

As shown on the chart, the Bollinger Bands Width expanded 0%, suggesting the KLCI is currently still consolidating. Support for the KLCI is still at 800 points while the 877 WinChart Automatic Fibonacci Retracement is still the next resistance for the KLCI.

As indicated by B, although the KLCI ended higher, total market volume was 12.4% lower, while still below the 40-day VMA level. It is important to have volume above the 40-day VMA level in order to sustain any bullish movement of the KLCI.

As mentioned on Tuesday's analysis, the Stochastic rebounded after touching 0% level, as it was over-sold. As a result, the KLCI rebounded on Wednesday. As circled at C, the Stochastic is breaking above the 30% level, suggesting a beginning of a technical rebound.

With the Stochastic at the 50% level now, the market movement for the short term is at neutral. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI. And definitely, the KLCI above the Bollinger Middle Band is another criteria for the KLCI to sustain its positive movement.

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