The FBM KLCI was trading at a narrow range on Friday. The KLCI opened higher and closed lower, but it managed to close above the 1270 level. Therefore, the 1270 WinChart Automatic Fibonacci Retracement is still the support for the KLCI while the resistance is still at 1300 psychological level.

As indicated by A, the Bollinger Bands contracted 2%, suggesting that the KLCI is entering yet another consolidation, and the Bollinger Middle Band is the dynamic support. In other words, provided that the KLCI is still supported by the Bollinger Middle Band, the KLCI is not yet forming a downtrend.

As indicated by B, total market volume declined 14.7%, breaking below the 40-day VMA level. This suggests that the market participation has reduced, partly due to the consolidation mood of the market as investors are staying on the sidelines.

As circled at C, the Stochastic is still above the 70% level, which suggests that the short term movement of the KLCI is still bullish biased. Technically speaking, if the Stochastic should break below 70% level, it would be an end to the short term bullishness of the KLCI. If the Stochastic should break below 30% level, it would be a short term bearish signal for the KLCI.

With the Bollinger Bands contracting, the KLCI is expected to consolidate again. But if the KLCI should stay above the Bollinger Middle Band, the immediate outlook for the KLCI is still on the positive side. If the KLCI should break below the Bollinger Middle Band, there is a risk of a reversal.

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