As indicated by A, the FBM KLCI were mostly lower on Friday, but it ended with a gain of 1.56 points at the close. The resistance for the KLCI remains at 1300 level while the support is at 1265 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted only 1%, and if the Bollinger Bands should continue to contract, the KLCI is likely to consolidate or to have its technical correction. If the KLCI should have a technical correction, the Bollinger Middle Band shall be its first target.

As indicated by B, total market volume continue to decline, falling 29.7%, but it is still above the 40-day VMA level. The lower volume during a consolidation is rather healthy, for investors take taking profit while others are waiting on the sidelines cautiously. Generally, with volume above the 40-day VMA level, the market is well-participated, and it is likely to help sustaining the positive market sentiment.

As circled at C, the Stochastic rebounded slightly while still staying above the 70% level, therefore, this suggests that the market movement for the short term is still bullish bias.

Basically, a technical correction or a consolidation for the KLCI is rather healthy, and the first target of the correction is usually the Bollinger Middle Band. If the KLCI should rebound from the Bollinger Middle Band, there is a chance that the KLCI to resume its current uptrend. Other wise, the KLCI might turn weaker.

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