On Monday, the KLCI rose 10.20 points to close at 1216.45 points. As indicated by A, the KLCI is closing precisely at the Bollinger Middle Band, which is the immediate resistance for the KLCI. If the KLCI should break above the Bollinger Middle Band, there is a chance for the KLCI to resume its uptrend. Support for the KLCI remains at 1200 psychological level, while the resistance is still at 1248 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands only expanded 1%, which is insignificant to give any signal. Therefore, the KLCI is basically still in its consolidation stage, while not following other regional markets negative movement.

As indicated by B, total market volume declined 7.4%, and therefore, volume is still below the 40-day VMA level, suggesting that the market participation is still relatively quiet, as investors are still waiting for a clearer of the market movement before taking any positions. Nevertheless, the lower volume is generally normal during a consolidating market.

As circled at C, the Stochastic is still rising, while testing the 30% level. This suggests that the short term movement of the KLCI is gradually improving. If the Stochastic should break above 30% level, it would be a signal suggesting a technical rebound for the KLCI, thus the KLCI is likely to regain some strength.

Despite negative performance of the regional markets, the KLCI managed to hold above the 1200 psychological level, and the contraction of the Bollinger Bands Width has reduced the volatility of the KLCI as the KLCI is still consolidating. With the KLCI testing the Bollinger Middle Band, it is a crucial point for the KLCI, for if the KLCI could break above the Bollinger Middle Band, there is a chance for it to resume its uptrend. In contrary, if the KLCI should remain resisted by the Bollinger Middle Band, the risk of a downside movement is still there.

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