As indicated by A, the KLCI tested the Bollinger Middle Band, but remained resisted by the Bollinger Middle Band dynamic resistance. In addition, the Bollinger Middle Band level on Wednesday is also very closed to the 853 WinChart Automatic Fibonacci Retracement. Nevertheless, support for the KLCI is still at 833 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted another 14%, suggesting the KLCI is still in its consolidation, while also preparing for a new movement.

As indicated by B, total market volume on Wednesday increased 3%, with volume getting closer to the 40-day VMA level. This shows that the market participation is improving, but still relatively insufficient. If volume should continue to increase and breaks above the 40-day VMA level, it would help the KLCI in testing the Bollinger Middle Band dynamic resistance again.

As circled at C, the MACD histogram is still rising, and therefore, the rounding bottom remains in sight, this shows that the KLCI short term movement is improving. However, with the MACD line still below the zero level, the KLCI mid to long term movement is still on the weaker side.

In short, the KLCI rally is only considered to be a technical rebound, for it is still still resisted by the Bollinger Middle Band. Basically, the Bollinger Bands Width has to expand with the KLCI above the Bollinger Middle Band, together with volume above the 40-day VMA level to confirm the bullish signal.

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