As indicated by A, the Bollinger Bands Width contracted another 18%, while the KLCI continue its sideways movement, closing 0.99 points higher. Support for the KLCI remains at 833 WinChart Automatic Fibonacci Retracement while the resistance are still at Bollinger Middle Band dynamic resistance and the 853 WinChart Automatic Fibonacci Retracement.

The contraction of the Bollinger Bands Width also imply that the KLCI is now preparing for a new movement, and therefore, as long as the Bollinger Bands Width is still contracting, the sideways movement of the KLCI is expected to continue.

As indicated by B, total market volume increased 22.2%, and the volume is getting closer to the 40-day VMA level. If volume should increase and break above the 40-day VMA level, it would be a positive signal for the KLCI, especially when the KLCI is testing the Bollinger Middle Band dynamic resistance.

As circled at C, the MACD histogram rounding bottom signal remains in place, suggesting the short term movement of the KLCI is still improving. However, with the MACD line still below the zero level, this shows that the the longer term movement of the KLCI is still on the weaker side.

In conclusion, a sideways movement would be the best scenario for the KLCI at this moment; this way, the market selling pressure is likely to reduce and a consolidation is likely to help investors to regain some confident. Therefore, after every consolidation, the KLCI would have another chance to pick some strength.

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