The KLCI gained 3.03 points on Thursday, to close at 1312.48 points. The KLCI is currently supported by the 1308 WinChart Automatic Fibonacci Retracement, which is the 23.6% Fibonacci Retracement line, and the resistance for the KLCI is at 1334.34 WinChart Automatic Fibonacci Retracement.

As indicated by A, the Bollinger Bands contracted 23%, suggest that the KLCI is still consolidating, and also preparing for a new movement, and the new movement shall begin when the Bollinger Bands re-expands, and the direction shall be determined by the relative position of the KLCI against the Bollinger Middle Band.

As indicated by B, total market volume increased 9.5%, with volume firmly above the 40-day VMA level. The increased of volume suggests an improvement of the market participation, thus implies that the investors confidence is gradually recovering.

As indicated by C, the Stochastic breaks above 50% level, suggesting that the KLCI continues its technical rebound. If the Stochastic should break above 70% level, it would be a short term bullish signal for the KLCI.

In conclusion, the contraction of the Bollinger Bands suggests that the KLCI is now gearing up for a new movement, and we shall wait for the re-expansion of the Bollinger Bands. If the Bollinger Bands should expands with the KLCI above the Bollinger Middle Band, together with the Stochastic breaking above 70% level, it would be an ideal bullish signal, and of course, volume has to stay above the 40-day VMA level.

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