The KLCI closed at 1300 level for the first time after 20 months, closing at 1300.35 points, gaining 2.36 points. As indicated by A, the KLCI had its intra-day high reaching 1302.36 points, but only managed to close marginally above the 1300 level; therefore, the 1300 is now the immediate support followed by 1288, while the next resistance is at 1354 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted another 40%, suggesting that the KLCI consolidation is still intact. With the Bollinger Bands now very narrow, it implies that the consolidation of the KLCI is near its end. Therefore, the KLCI is poised for a new movement, and if the Bollinger Bands should re-expand with the KLCI above the Bollinger Middle Band, the KLCI would resume its uptrend.

As indicated by B, total market volume increased 1.7%, while still above the 40-day VMA level. Therefore, the market is still actively participated, and the market sentiment is likely to remain positive.

As circled at C, the Stochastic remains above 70% level, suggesting that the short term movement for the KLCI is still bullish bias. Therefore, the short term bullishness of the KLCI is expected to carry on, until the Stochastic should break below 70% level.

In conclusion, the contraction of the Bollinger Bands suggests that the KLCI is still consolidating, and when the Bollinger Bands should re-expand, it would be a signal suggesting of a new movement, and the direction of the new movement shall be determined by the relative position of the KLCI above or below the Bollinger Middle Band.

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