As indicated by A, the KLCI failed to sustain Tuesday's gain, closing 4.88 points lower on the last trading day of 2008. Therefore, the contraction of the Bollinger Bands Width suggesting that the KLCI is still consolidating, with the Bollinger Middle Band still serving as the dynamic support. Resistance for the KLCI is still at 887 WinChart Automatic Fibonacci Retracement.

Despite the KLCI moving sideways, the immediate outlook for the KLCI is still positive as the KLCI is supported by the Bollinger Middle Band. If the Bollinger Bands Width should re-expand again, the KLCI is likely to continue its positive movement. However, if the KLCI should break below the Bollinger Middle Band, the immediate outlook for the KLCI would turn bearish biased.

As indicated by B, total market volume on Wednesday is still below the 40-day VMA level, despite increasing 19.1%. This shows that the overall market participation is still very low. It is important to have a significant increase of volume if the KLCI was to break above the 887 resistance.

As circled at C, the Stochastic retreated as the KLCI closed lower, but it is still above the 70% level, and therefore, still showing a short term bullish signal. Provided that the Stochastic could remain above 70% level, the market movement for the short term is still bullish biased.

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