The FBM KLCI continued its rally as the Bollinger Bands re-expanded. The KLCI had its intra-day high reaching 1279.08, as indicated by A, but it gave up most of its gain due to profit taking, closing at 1265.74 points. Resistance for the KLCI remains at 1300 to 1305 level, while the support is still at 1248 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the KLCI is still supported by the Bollinger Middle Band, and therefore, the immediate outlook for the KLCI is still bullish biased, provided that the Bollinger Bands is still expanding. On the other hand, if the Bollinger Bands Width should begin to contract, or the expansion rate is declining, it implies that the KLCI is having a technical correction or a consolidation, and then, the Bollinger Middle Band shall be the dynamic support for the KLCI.

As indicated by B, total market volume declined 7.4%, but still firmly above the 40-day VMA level. This shows that the market overall is well-participated, and this is also a positive element to sustain the positive market sentiment.

As circled at C, the MACD histogram is still rising, suggesting that the KLCI is still gaining strength. If the MACD histogram should form a Rounding Top, it would be a signal suggesting that the KLCI is having a technical correction.

Meanwhile, with the Stochastic still above 70% level, the short term movement of the KLCI is still bullish biased. Nonetheless, the KLCI formed a long upper shadow candlestick on Tuesday, which implies that the KLCI is likely to have a technical correction. But as long as the KLCI is still supported by the Bollinger Middle Band, the uptrend is still intact.

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