As indicated by A, the FBM KLCI rebounded from the Bollinger Middle Band, ended 1.55 points higher on Thursday. This suggests that the Bollinger Middle Band is still serving as the dynamic support for the KLCI, while the other support for the KLCI is still at 1270. Resistance for the KLCI is at 1300 psychological level.

As shown on the chart above, the Bollinger Bands contracted 13%, suggesting that the KLCI is still consolidating. If the Bollinger Bands should re-expands, it would be a signal suggesting the end of the consolidation, then, the position of the KLCI above or below the Bollinger Middle Band shall determine the direction of the new movement for the KLCI.

As indicated by B, total market volume increased 43%, with volume firmly above the 40-day VMA level. This suggests that the overall market is well-participated. However, most of the volume on Thursday were from the trading of Maxis and some newly listed counters, and also some warrants. Therefore, this has not totally reflect the market strength. Nonetheless, provided the volume should remain above the 40-day VMA level, the market sentiment as a whole shall remain positive.

As indicated by C, the Stochastic is still falling, suggesting that the KLCI short term movement is still weakening. If the Stochastic should break below 30% level, it would be a short term bearish signal for the KLCI.

With the Bollinger Bands still contracting, the consolidation of the KLCI remains intact. Fortunately, the KLCI is still supported by the Bollinger Middle Band, and the immediate outlook for the KLCI is still on the positive side. However, if the KLCI should break below the Bollinger Middle Band, the KLCI would be turning weak. Still, the new movement of the KLCI still need to be confirmed with the re-expansion of the Bollinger Bands.

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