After forming a candlestick with a long upper shadow on Tuesday, which implied a technical correction, the KLCI ended lower on Wednesday, losing 5.68 points to close at 1260.06 points. Support for the KLCI remains at 1248 WinChart Automatic Fibonacci Retracement while the resistance are found at 1270 points as well as 1300 WinChart Automatic Fibonacci Retracement.

Technically speaking, the Bollinger Bands contracted 10%, as indicated by A, suggested that the KLCI is having its consolidation. Generally, the Bollinger Middle Band is the first target of the technical correction, and if the KLCI should rebound from the Bollinger Middle Band, there is a chance for the KLCI to resume its uptrend.

As indicated by B, total market volume declined 25%, but volume remains above the 40-day VMA level, suggesting that the market participation is still sufficient, but reduced due the correction of the KLCI. Nevertheless, with volume above the 40-day VMA level, the market sentiment overall is still on the positive side. If volume should slide below the 40-day VMA level, the consolidation of the KLCI is expected to drag on further.

As indicated by C, the MACD histogram begins falling, forming a Rounding Top, this suggests that the KLCI is having its technical correction, and the weakening of the KLCI is expected to continue until the MACD histogram should form a Rounding Bottom.

In short, the Bollinger Bands contraction suggests that the KLCI is having its technical correction. If the KLCI should break below the Bollinger Middle Band, the weakening movement of the KLCI is likely to continue. On the other hand, if the KLCI should rebound from the Bollinger Middle Band, there is a chance for the KLCI to resume its uptrend.

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