The consolidation of the KLCI continues on Friday, while still supported by the Bollinger Middle Band (as indicated by A). Therefore, the Bollinger Middle Band is still serving as the dynamic support for the KLCI. Generally, provided that the KLCI is supported by the Bollinger Middle Band, the immediate outlook is still on the positive side. 1270 WinChart Automatic Fibonacci Retracement remains as the support for the KLCI while the resistance is still at 1300 psychological level.

As shown on the chart, the Bollinger Bands contracted 31%, suggesting that the KLCI is indeed consolidating, and the consolidation is expected to carry until the Bollinger Bands re-expands. Technically, if the Bollinger Bands should re-expand with the KLCI above the Bollinger Middle Band, the KLCI is likely to resume its uptrend.

As indicated by B, total market volume declined 36.5%, breaking below the 40-day VMA level, which is usually normal for the KLCI is consolidating. As mentioned on Thursday, the sudden increased of volume on Thursday was mostly contributed from Scomi-LA and Maxis, thus did not truly reflect the market strength. Nevertheless, with volume below the 40-day VMA level, the KLCI is expected to stay in consolidation mood.

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

In short, the Bollinger Bands contracts, and the KLCI consolidation continues. Immediate outlook for the KLCI is still positive for it is still staying above the Bollinger Middle Band. Therefore, should the Bollinger Bands re-expands with the KLCI above the Bollinger Middle Band, it would be a bullish signal suggesting that the KLCI might resume its uptrend. Otherwise, if the KLCI should stay below the Bollinger Middle Band when the Bollinger Bands expands, it would be a bearish signal.

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