As indicated by A, the KLCI is testing the L2 downtrend line with a narrow daily range, closing 0.80 points higher to 878.81 points. Supports for the KLCI are still at 869 WinChart Automatic Fibonacci Retracement and the Bollinger Middle Band dynamic support while the resistance is still at 885 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width expanded 15%, with the KLCI above the Bollinger Middle Band. Therefore, this shows that the immediate outlook for the KLCI is still positive biased. Nevertheless, the KLCI is having its pullback effect after being over-heated, and generally, the KLCI is likely to move sideways before attempt to resume its upside movement.

As indicated by B, total market volume declined 46%, but volume is still above the 40-day VMA level. This suggests that the overall market participation is still sufficient. If the KLCI should resume its rally, volume above the 40-day VMA level is imperative.

As circled at C, the Stochastic does not break below 70% level, and therefore, the short term bullish signal remains intact. In other words, as long as the Stochastic is still above 70%, the short term movement for the KLCI is likely to be bullish biased.

In conclusion, a sideways movement for the KLCI is expected for the moment, as the KLCI has not broken above the L2 line successfully. Nevertheless, as long as the KLCI is still supported by the Bollinger Middle Band with volume above the 40-day VMA level, the bullish biased movement is likely to resume after its sideways consolidation.

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