As shown on the chart above, the Bollinger Bands contracted 17%, as this suggests that the KLCI is trendless. Fortunately, with the KLCI still above the Bollinger Middle Band, the immediate technical outlook for the KLCI is on the positive side. Nevertheless, the KLCI is expected to consolidate further.

As indicated by B, total market volume fell 33.25%, with volume below the 40-day Volume Moving Average. The drop of volume suggests that the market was relatively quiet, but generally, a lower volume is normal as the KLCI is consolidating. However, if the KLCI should break above the T1 line, a strong volume is needed to confirm the break out.

As indicated by C, the Stochastic remains above 70%, and this shows that the market movement for the short term is still positive.

In short, the KLCI is consolidating, within the T1 and T2 line. If the Bollinger Bands should re-expanded significantly with the KLCI above the Bollinger Middle Band, the KLCI would break above the T1 line and re-test the 1532 resistance.

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