As indicated by A, the KLCI is still supported by the Bollinger Middle Band, and therefore, the Bollinger Middle Band dynamic support remains intact. Resistance for the KLCI is still at 887 WinChart Automatic Fibonacci Retracement while the support is at 800 psychological level. Also, the T1 line is also a support reference.

As shown on the chart, the Bollinger Bands Width contracted 4%, suggesting the KLCI is now consolidating. If the Bollinger Bands Width should re-expand again with the KLCI above the Bollinger Middle Band, it would be a bullish biased signal.

As indicated by B, total market volume is still further below the 40-day VMA level, as it made a 3 years new low; this shows that the overall market participation is still very low. But still, it is considered normal to see lower in volume as the KLCI is still consolidating.

As circled at C, the Stochastic is still falling while reaching 50% level, suggesting the short term movement of the KLCI is still weakening. But as the Bollinger Bands Width is still contracting, signals from the secondary indicators might be over sensitive. Therefore, the priority of the analysis should be on the primary indicator such as Bollinger Bands.

In short, the KLCI is likely to consolidate, and the contraction of the Bollinger Bands Width also suggest that the KLCI is gearing up for a new movement, and the direction of the new movement of the KLCI shall be revealed as the Bollinger Bands Width re-expand.

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