As indicated by A, the Bollinger Bands expanded another 27% on Wednesday, with the KLCI above the Bollinger Middle Band, and the KLCI gained another 4.93 points to close at 1293.17 points. The immediate support for the KLCI is at 1288 followed by 1257 WinChart Automatic Fibonacci Retracement, while the next resistance is at 1300 level.

As shown on the chart above, the KLCI is still supported by the Bollinger Middle Band, and the immediate outlook is still bullish bias. Technically speaking, the upside movement of the KLCI is expected to continue until the Bollinger Bands should contracts. When the Bollinger Bands contracts, it means that the KLCI is consolidating.

As indicated by B, total market volume declined 11.2%, but still firmly above the 40-day VMA level. Therefore, the overall market participation is still at a healthy level, and provided that the volume is above the 40-day VMA level, it suggests that the market is well liquid as well as the improved sentiment.

As indicated by C, the Stochastic is still situated above the 70% level, which is the short term bullish territory. Until it breaks below 70% level, the short term movement for the KLCI is on the positive side.

In short, the KLCI rally remains intact, until the Bollinger Bands should contract, or the Stochastic breaks below 70% level, then, the KLCI might have a technical correction or enter a consolidation stage. Then, the Bollinger Middle Band shall serve as the dynamic support, and if the KLCI should remains supported by the Bollinger Middle Band, the bullish biased movement shall remains in place.

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