On Tuesday, the FBM KLCI gained another 2.49 points, to close at 1275.22 points while the Bollinger Bands expanded 14%. As indicated by A, the KLCI is now above the Bollinger Middle Band, thus the immediate outlook for the KLCI is on the positive side. Therefore, should the Bollinger Bands continue to expand, more upside movement for the KLCI is likely, until the Bollinger Bands should contract again.

As shown on the chart above, the KLCI regain some strength after rebounded from the 1257 WinChart Automatic Fibonacci Retracement, and if the KLCI could break above 1288 level, the next resistance would be at the 1300 psychological level. Support for the KLCI is still at 1257 while the immediate resistance is at 1288 WinChart Automatic Fibonacci Retracement.

As indicated by B, total market volume increased 25.4%, although it has not reached the 40-day VMA level. The increased of market volume is a good sign as it shows that the market participation is now increasing, which implies an improvement of the market sentiment as well as confidence.

As circled at C, the Stochastic touched 100%, which suggests that the short term movement of the KLCI is in deed strong, but slightly over-heated. But still, provided that the Stochastic could maintain its position above 70% level, the market movement for the short term is still bullish biased.

In conclusion, the KLCI short term is improving, and if the Bollinger Bands should continue to expand while the KLCI staying above the Bollinger Middle Band, coupled with the continue increased of volume, the upside movement of the KLCI is likely to carry on.

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