As indicated by A, t he FBM KLCI gained 3.39 points or 0.3%, after successfully rebounded from the 1250 support level. Therefore, the 1250 WinChart Automatic Fibonacci Retracement is still the support for the KLCI while the resistance is at 1272 followed by the Bollinger Middle Band dynamic resistance.

As shown on the chart above, the Bollinger Bands only expanded 2%, which suggesting that the expansion rate has declined sharply. This implies that the KLCI is likely to consolidate now. If the Bollinger Bands should continue to contract, the consolidation of the KLCI is expected to carry on with the Bollinger Middle Band being the target.

As indicated by B, total market volume reduced 4.6%, which is now below the 40-day VMA level. This suggests that the overall market participation is insufficient, thus the market is lack of buying interest to off set the selling pressure. Therefore, technically, if volume should remain below the 40-day VMA level, the KLCI is less likely to pick up some strength.

As circled at C, the Stochastic rebounded after breaking below 10% level. However, it failed to break above 30% level, and the short term bearish signal for the KLCI remains intact.

In conclusion, the FBMACE is likely to have a technical rebound, and the Bollinger Middle Band is the target. If the KLCI should break above the Bollinger Middle Band successfully, there is a chance for the KLCI to pick up some strength, or it might resume its uptrend.

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