The KLCI fell 2.15 points on Friday, amid the absence of some fresh leads, while supported by the Bollinger Middle Band, as indicated by A. this suggests that the Bollinger Middle Band is still serving as the dynamic support for the KLCI. Meanwhile, the 1257 WinChart Automatic Fibonacci Retracement is also the support for the KLCI, while the resistance is at 1288 and 1300 level.

As shown on the chart above, the Bollinger Bands is still contracting, suggesting the consolidation of the KLCI continues.

As indicated by B, total market volume increased only 2.2%, and as a result, the volume is still below the 40-day VMA level, suggesting that the market overall is still relatively quiet. Nonetheless, it is quite normal to have lower market activities as the KLCI is consolidating, investors are mostly staying on the sidelines.

As circled at C, the Stochastic retreated slightly, but still managed to stay above 70% level. Therefore, the short term movement of the KLCI is still on the bullish side, unless the Stochastic should break below 70% level.

In conclusion, although the KLCI has not returned to above the L1 uptrend line, it is actually preparing for a new movement, as the Bollinger Bands contracts. However, the direction of the new movement will only be revealed once the Bollinger Bands re-expands, and the relative position of the KLCI against the Bollinger Middle Band shall determine the direction of the new movement.

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