As shown on the chart above, the Bollinger Bands contracted 5%, suggest that the KLCI is indeed consolidating, while also preparing for a new movement. The market direction is likely to be uncertain, until the re-expansion of the Bollinger Bands, then the new direction would be determined by the position of the KLCI above or below the Bollinger Middle Band.

As indicated by B, total market volume increased 16.2%, with volume still above the 40-day VMA level. Generally, the market sentiment as a whole is still on the positive if volume could maintain firmly above the 40-day VMA level.

As indicated by C, the MACD histogram fell below the zero level, suggesting that the MACD line has crossed below the trigger line. This is a signal suggest a weakening movement for the KLCI, and the weakening of the KLCI is expected to carry on until the MACD histogram should form a Rounding Bottom.

The KLCI is consolidating with positive technical outlook, as the KLCI uptrend is unaffected, with the 14, 21, 31 EMA still supporting the KLCI. Nevertheless, whether or not the KLCI could resume its uptrend rally, we shall later decide with a clearer Bollinger Bands signal.

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