The FBM KLCI retreated marginally, 0.49 points, to close at 1233.33 points, and as a result, the Bollinger Bands only expanded 15%. (As indicated by A) As shown on the chart, the KLCI is still above the Bollinger Middle Band, and therefore, the immediate outlook for the KLCI is still on the positive side despite some profit taking activities.

With the expansion rate of the Bollinger Bands slows down, the KLCI might be consolidating soon. The Bollinger Middle Band is still the dynamic support for the KLCI while the 1200 psychological support level remains intact. Resistance for the KLCI remains at 1248 WinChart Automatic Fibonacci Retracement.

As indicated by B, volume continue to decline, while staying below the 40-day VMA level. This suggests that the overall market participation is still low, as investors confidence is still weak as they choose to stay on the sidelines.

As indicated by C, the MACD histogram is gradually forming a Rounding Bottom, suggesting that the short term movement of the KLCI is gradually improving. Generally, provided that the MACD histogram is still rising, the improvement of the KLCI movement is expected to continue until if forms a Rounding Top.

In short, the slower expansion rate of the Bollinger Bands implies that the KLCI might be consolidating. But nevertheless, as long as the KLCI is still supported by the Bollinger Middle Band, the uptrend is still intact. In other words, if the KLCI should break below the Bollinger Middle Band, it would be a signal suggesting the end of the current rally.

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