As shown on the chart, the Bollinger Bands Width continues to contract, and therefore, the KLCI traded in narrow range on Thursday, closing 1.01 points lower. As indicated by A, the Bollinger Middle Band is now the dynamic support for the KLCI, while the support remains at 1200 psychological level. Resistance for the KLCI is still at 1248 WinChart Automatic Fibonacci Retracement.

Generally, when the Bollinger Bands Width is contracting, the KLCI is likely to move sideways with lower fluctuation, and this low volatile movement is likely to sustain until the re-expansion of the Bollinger Bands Width. Nevertheless, the KLCI is still staying above the 14, 21, 31 EMA, suggesting that the long term movement of the KLCI is still on trending up.

As indicated by B, total market volume increased 10.8%, but still below the 40-day VMA level. Therefore, the overall market participation is still quiet. If the KLCI should resume its uptrend with volume increasing, the uptrend is likely to sustain.

As indicated by C, the MACD histogram formed a Rounding Top, suggesting that the short term movement of the KLCI is losing some strength, thus a sign of a technical correction. The short term weakening movement shall continue until the MACD histogram should form a Rounding Bottom.

With the Bollinger Bands Width contracting, the KLCI remains consolidating with lower volatility, and the consolidation is likely to continue until the re-expansion of the Bollinger Bands Width. Meanwhile, the Bollinger Middle Band as well as the 14, 21, 31 EMA are still serving as the dynamic support for the KLCI, and if the KLCI should break below these dynamic support, it might be a sign that the KLCI is turning weak.

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