As indicated by A, the Bollinger Bands Width contracted another 11%, and the KLCI only rose 2.4 points. Despite the KLCI is closing higher, it is still considered in its consolidation stage. Resistance for the KLCI is unchanged at 1248 WinChart Automatic Fibonacci Retracement while the support is at 1200 psychological level.

With the KLCI above the Bollinger Middle Band, the immediate outlook is still positive, even though the KLCI is consolidating. In other words, if the KLCI should break below the Bollinger Middle Band, the KLCI might be turning weak. Nevertheless, when the Bollinger Bands Width is contracting, the KLCI is consolidating while preparing for a new movement.

As indicated by B, total market volume declined 15.8%, and as a result, volume is now below the 40-day VMA level. This suggests that the market participation has reduced. Nonetheless, as the Bollinger Bands Width is contracting, the quieter market participation implies that investors are still waiting for more fresh lead.

As circled at C, the Stochastic touched 100%, suggesting that the KLCI short term is now over-heated. But as long as the Stochastic is still above 70% level, the short term market movement for the KLCI is still bullish biased, unless the Stochastic should break below 70% level.

In short, the KLCI outlook is still bullish biased. However, due to the shortening of trading week ahead of the festive holiday, the market participation is lower and as a result, the KLCI gained only marginally. Technically speaking, the KLCI is still consolidating and the fluctuation of the KLCI is expected to reduce, until the re-expansion of the Bollinger Bands.

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