The KLCI had an early gain on Thursday, up to its daily high of 1299.70, but as profit taking kicks in, the KLCI retreated, losing 1.75 points at the close. As indicated by A, the 1299.70 (1300 psychological level) is still the immediate resistance for the KLCI. Support for the KLCI is at 1265 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 0%, suggesting that the KLCI is having its about to consolidate. Generally, when the Bollinger Bands contracts, the KLCI will consolidate or have its technical correction. Currently, the Bollinger Middle Band is serving as the dynamic support for the KLCI. If the KLCI should break below the Bollinger Middle Band, the immediate outlook for the KLCI shall turn negative.

As indicated by B, total market volume declined 11%, but still above the 40-day VMA level. Therefore, the overall market participation is still sufficient, as the market sentiment is still positive. Generally, provided that the volume could maintain above the 40-day VMA level, the KLCI rally is likely to be sustainable.

As indicated by C, the Stochastic retreated further, suggesting that the KLCI is about to have its technical correction. If the Stochastic should break below 70% level, it would be a signal suggesting a beginning of a technical correction.

In short, the KLCI ended lower on Thursday and the Bollinger Middle Band is now an important dynamic support. If the KLCI should rebound from the Bollinger Middle Band, there is a good chance that the KLCI might resume this uptrend. Other wise, if the KLCI should break below the Bollinger Middle Band, the rally shall come to a temporary end.

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