On Monday, the KLCI ended slightly lower but still supported by the Bollinger Middle Band (as indicated by A). Therefore, the Bollinger Middle Band can serve as the dynamic support for the KLCI. Resistance for the KLCI is still at 887 WinChart Automatic Fibonacci Retracement while 800 point is still the support level.

As shown on chart, the Bollinger Bands Width contracted another 17%, suggesting the consolidation of the KLCI is still intact. Also, this implies that the KLCI is still preparing for a new direction, and the new direction shall be revealed once the Bollinger Bands Width re-expands. On the other hand, the KLCI is still trading under the T1 and T2 downtrend channel, and therefore, unless the KLCI could break out successfully above the T1 line, the downtrend shall remains intact.

As indicated by B, total market volume declined 6.2%, and volume is still below the 40-day VMA level, suggesting the overall market participation is still low. This is generally normal as the KLCI is still consolidating.

As circled at C, the Stochastic falls and break below 50% level, suggesting the short term movement of the KLCI is still on the weaker side. Still, since the Bollinger Bands Width is still contracting, signal from the Stochastic might be a little over sensitive.

In short, the market movement for the KLCI is still unclear as the Bollinger Bands Width is still contracting. Therefore, we will still have to wait until the Bollinger Bands Width to expand before determining the next direction for the KLCI.

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