Due to the over-night gain of the Dow Jones Industrial Average, the KLCI opened higher on Wednesday with an intra-day high reaching 1059.88 points. However, the KLCI soon started falling and ended the day with a lost of 3.95 points. Therefore, the resistance for the KLCI remains at 1053 WinChart Automatic Fibonacci Retracement while the supports are still T2 line and Bollinger Middle Band.

As indicated by A, the Bollinger Bands Width expanded only 4%, from the previous day of 12%, suggesting that the Bollinger Bands Width might be contracting, thus the KLCI is about to consolidate or to have a technical correction. Generally, the first target of the correction is the Bollinger Middle Band.

As indicated by B, total market volume declined another 9.4%, with volume below the 40-day VMA level. This shows that the market participation is insufficient, thus the KLCI failed to break above the 1053 WinChart Automatic Fibonacci Retracement. If volume should remain below the 40-day VMA level, the KLCI is likely to stay weak.

As circled at C, the Stochastic continues to fall on Wednesday, but still above the 70% level. This shows that the short term movement for the KLCI is still bullish, but with a chance of a technical correction. Nevertheless, the Stochastic has to break below 70% level in order to signal a beginning of a technical correction.

Despite opening higher on Wednesday, the KLCI failed to break above the 1053 WinChart Automatic Fibonacci Retracement amid the lack of market participation. With the Bollinger Bands Width likely to contract, the KLCI is about to have its technical correction. Nevertheless, the contraction of the Bollinger Bands Width would also suggests that the KLCI is now preparing for a new movement.

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