On Wednesday, the KLCI ended 8.22 points lower, while closing at 1055.40 points at the T2 uptrend line. Therefore, the T2 uptrend line and the Bollinger Middle Band are still the dynamic support for the KLCI while the resistance is still at 1077 Fibonacci Retracement.
As indicated by A, the Bollinger Bands Width contracted 25%, suggesting that the KLCI is still consolidating. As long as the Bollinger Bands Width is still contracting, the KLCI is likely to move sideways with some bearish biased.
As indicated by B, total market volume declined 15.1%, with volume barely above the 40-day VMA level. This shows that the overall market is still well-participated. However, if the KLCI should continue to consolidate, a lower volume is usually normal.
For the first time since 19th of May, the Stochastic breaks below the 70% level, suggesting a beginning of a technical correction for the KLCI. Unless the Stochastic could return to above 70% level, the short term movement of the KLCI is expected to be on the weaker side.
With the T2 and Bollinger Middle Band overlapping, the dynamic support is an important for the KLCI. Nevertheless, with the Bollinger Bands Width contracting, it suggests that the KLCI is still preparing for a new movement. If the Bollinger Bands Width should re-expand with the KLCI above the Bollinger Middle Band, there is a chance for the KLCI resume its uptrend. However, if the KLCI should stay below the Bollinger Middle Band, more downside risk is expected for the KLCI.