On Thursday, the KLCI lost 0.66 of a points to close at 1362.08 points, while the resistance stays at 1400 psychological level, and the support remains at 1354 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted another 6%, this suggests that the KLCI is indeed taking a consolidation, and the consolidation shall carry on until the re-expansion of the Bollinger Bands. Meanwhile, the Bollinger Middle Band is still acting as the dynamic support for the KLCI.

As indicated by B, total market volume increased 22.5%, with volume firmly above the 40-day VMA level. This suggests that the market is actively participated, thus the general market sentiment is likely to be positive.

As indicated by C, the Stochastic is still falling, but it stays above the 70%, thus the short term bullish signal remains intact. If the Stochastic should break below 70%, it would be a signal suggesting a beginning of a technical correction.

In short, the KLCI is consolidating, while above the Bollinger Middle Band, thus the immediate technical outlook is still positive. We shall wait for the re-expansion of the Bollinger Bands, then will determine the new direction of the KLCI with the position of the KLCI above or below the Bollinger Middle Band.

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