As indicated by A, the KLCI retreated 10.85 points on Thursday, closing slightly below the Bollinger Middle Band dynamic support. If the KLCI should stay below the Bollinger Middle Band, the immediate outlook for the KLCI would begin to turn bearish biased. Nevertheless, the Bollinger Bands Width is still contracting, suggesting that the KLCI is still consolidating. Resistance for the KLCI remains at 1053 WinChart Automatic Fibonacci Retracement while the supports are at 1000 mark as well as the 200-day MA.

As indicated by B, total market volume declined 15.1%, but still higher above the 40-day VMA level. This shows that the market participation is still very active, but with the KLCI falling, the relatively higher volume would actually suggests that the selling pressure is greater than the buying interests at the moment.

As circled at C, the Stochastic broke below 70%, suggesting that the KLCI has begun its technical correction. If the Stochastic should failed to return to above 70% level in the short term, the short term movement of the KLCI is expected to be weaker.

The contraction of the Bollinger Bands Width not only suggesting a consolidation signal for the KLCI, but also implying that the KLCI is preparing for a new movement. However, the direction of the next move will only be revealed when the Bollinger Bands Width re-expands.

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