Despite the sharp fall of regional markets due to the major losses in the US markets, the KLCI moved sideways, as the Bollinger Bands Width did not expand (As indicated by A), losing only 2.1 points at 1206.25 points. Support for the KLCI is still at 1200 psychological level followed by 1184 WinChart Automatic Fibonacci Retracement, while the resistance is at 1248 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width only expand 1%, and therefore, the band width is still basically contracting while suggesting that the KLCI is still consolidating, and preparing for a new movement. If the Bollinger Bands Width should re-expand with the KLCI below the Bollinger Middle Band, it would be a bearish signal for the KLCI.

As indicated by B, total market volume increased 18.1%, suggesting some bargain hunting activities. But still, volume is still below the 40-day VMA level, and therefore, the overall market participation is still quiet, as the KLCI is still consolidating.

As circled at C, the Stochastic retreated, failing to break above 30% level. Therefore, the short term bearish signal remains intact, and the market movement for the short term is still bearish biased, until a valid break out above the 30% level.

In short, the contraction of the Bollinger Bands Width has prevented the KLCI from falling like other regional markets. Nevertheless, if the Bollinger Bands Width should re-expands with the KLCI below the Bollinger Middle Band, the outlook for the KLCI is expected to be on the negative side.

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