The FBM KLCI corrected slightly on Wednesday, losing 4.10 points to close at 1271.12 points. As indicated by A, the support for the KLCI remains at 1257 WinChart Automatic Fibonacci Retracement while the resistance is still at 1288 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 2%, suggesting that the KLCI might be consolidating again. Nonetheless, the immediate outlook for the KLCI is still on the positive side as the KLCI is still supported by the Bollinger Middle Band, which is serving as the dynamic support.

As indicated by B, total market volume increased 1.8%, with volume getting closer to the 40-day VMA level. Overall, the market participation has improved gradually, and generally, the improvement of market volume is a good sign as the inflow of fresh capital increases.

As circled at C, the Stochastic retreated after touching 100%, which was an over-heated signal. However, provided that the Stochastic could maintain its position above the 70% level, the short term bullish signal shall remains intact.

In conclusion, after rising for 5 days, the KLCI has its mild correction on Wednesday. Technically speaking, with the KLCI supported by the Bollinger Middle Band, the immediate view of the KLCI is still on the brighter side.

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