As indicated by A, the FBM KLCI gained 4.35 points on Wednesday, and tested the 1272 WinChart Automatic Fibonacci Retracement, but failed to break above this resistance, while the support is at 1266.45 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands begins to expand, which is a positive sign. If the Bollinger Bands should continue to expand with the KLCI above the Bollinger Middle Band, the positive signal is expected to carry on, until the next contraction of the Bollinger Bands.

As indicated by B, total market volume declined 2.2%, while staying below the 40-day VMA level, this suggests that the market is still quiet as the confidence from investors is still low. Therefore, this has not confirmed the bullish Bollinger Bands signal.

As indicated by C, the MACD histogram is still staying above the positive territory, suggesting that the KLCI movement is still on the positive side while gradually gaining strength. The positive signal is expected to carry on until the MACD histogram should form a Rounding Top.

In conclusion, the KLCI is gaining some losing ground without sufficient volume, and therefore, despite technical signals are suggesting improving technical outlook, the volume gives no strength to these bullish signals. Nonetheless, the KLCI is indeed showing positive signal, until the Stochastic should break below 705 level, or the MACD histogram forms a Rounding Top.

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