Despite breaking above the Bollinger Middle Band marginally, the KLCI remains in its consolidation stage as the Bollinger Bands is still contracting. (-4%). Nevertheless, with the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI is still on the positive side. If the Bollinger Bands should re-expands with the KLCI above the Bollinger Middle Band, there is more upside room for the KLCI.

As indicated by A, the KLCI retreated slightly on Tuesday, but managed to be supported by the Bollinger Middle Band; therefore, the Bollinger Middle Band is serving as the dynamic support for the KLCI. Resistance for the KLCI is still at 1248 WinChart Automatic Fibonacci Retracement while the support is still at 1200 psychological level.

As indicated by B, total market volume increased marginally, while moving closer toward the 40-day VMA level. It seems like the market participation is gradually improving, relatively. If volume should break above the 40-day VMA level, it would be a positive element for the KLCI rally. But if volume should remains below the Bollinger Middle Band, the KLCI is likely to consolidate further.

As circled at C, the Stochastic touched 50% level, and therefore, the Stochastic has not shown any short term bullish signals. Generally, the Stochastic has to break above, and maintain above 70% level, in order to signal a short term bullish signal.

In conclusion, the KLCI did not go in line with the regional markets' volatility as the Bollinger Bands Width is contracting, and the KLCI continues its sideways movement. The contraction of the Bollinger Bands suggests that the KLCI is still preparing for a new movement, and the new movement shall only begin when the Bollinger Bands Width re-expands. If the Bollinger Bands was to expand with the KLCI above the Bollinger Middle Band, it would be a bullish movement, and other wise, if would be a bearish biased movement.

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