On Thursday, the KLCI tested the T2 line, with an intra-day low reaching 1037.09 points. However, it was precisely supported by the Bollinger Middle Band, and rebounded to close at 1041.24 points, down 6.44 points. Therefore, the Bollinger Middle Band is still the support for the KLCI, while the 1053 is still the resistance. (Study A)

As shown on the chart above, the Bollinger Bands Width did not expand, suggesting that the KLCI is consolidating, or even a chance for a technical correction. The contraction of the Bollinger Bands Width also suggests that the KLCI is now preparing for a new movement.

As indicated by B, total market volume declined 25.4%, with volume now below the 40-day VMA level. This shows that the overall market is quiet, thus suggesting a lack of inflow of fresh capital. Therefore, with volume remains below the 40-day VMA level, the KLCI is likely to move sideways or with some downside biased.

As circled at C, the Stochastic is testing the 70% level, if it should break below 70% level, it would means a beginning of a technical correction. If the Stochastic should break below 30% level, it would be a signal suggesting a short term weakening movement for the KLCI.

As the KLCI repeated resisted by the 1053 WinChart Automatic Fibonacci Retracement, it started to consolidate amid the absence of positive news. However, this does not mean an end to the uptrend yet, for the Bollinger Bands Width has not expanded. Generally, we have to wait until the Bollinger Bands Width should expand, then only one to determine whether the KLCI would resume its uptrend or to turn weaker by the position of the KLCI above or below the Bollinger Middle Band.

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