As indicated by A, the KLCI tested the 900 points on Thursday, but failed to break above the 900 mark, closing 0.3% lower. Support for the KLCI remain at 885 and 887 WinChart Automatic Fibonacci Retracement, and the resistance is 905 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width only expanded 3%. With its expansion rate slowing down, it seems like the KLCI is going to consolidate again, while the Bollinger Middle Band is the dynamic support for the KLCI, and also usually the first target of the correction.

As indicated by B, total market volume increased 8.4%, but still below the 40-day VMA level. This shows that the overall market is still lightly participated. If volume should remain below the 40-day VMA level, the KLCI is likely to consolidate with some downside biased.

As circled at C, the Stochastic breaks below 70% level by margin. If the Stochastic should continue to fall, it would end the short term bullish signal, which is also a signal suggesting a beginning of a technical correction.

In short, the KLCI is still at its consolidation stage. With negative sentiment across the globe, the market direction for the KLCI remains unclear. Generally, the best consolidation for the KLCI, during the contraction of the Bollinger Bands Width, would be a low volatile sideways movement.

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