Using "Night Rider" code to fade through rgb led colours

I have this code from the net to simulate the "Night Rider" led chasing effect and want to us it to fade through the colours on a rgb led.


This is the "night Rider" code.

LIST P=16C84

; Night Rider simulation - original
;
PORTB EQU 6
TRISB EQU 86H
OPTREG EQU 81H
STATUS EQU 3
CARRY EQU 0
RP0 EQU 5
MSB EQU 3 ; .................BIT POSITION OF LEFTMOST LED
;
CLRF PORTB ; ...............ALL LEDS OFF
BSF STATUS,RP0 ;.........SELECT REGISTER BANK 1
CLRF TRISB^80H ;.........SET PORTB TO ALL OUTPUTS
MOVLW 0AH
MOVWF OPTREG^80H ;..ASSIGN PRESCALER (1:4) TO WDT
BCF STATUS,RP0 ;........SELECT REGISTER BANK 0
INCF PORTB,F ;............TURN ON RIGHTMOST LED
BCF STATUS,CARRY ;....CLEAR CARRY
LEFT SLEEP ;...............WAIT FOR WDT TIMEOUT
RLF PORTB,F ;..............TURN ON LED TO LEFT
BTFSS PORTB,MSB ;......REACHED LEFTMOST?
GOTO LEFT ;...............LOOP IF NOT
RIGHT SLEEP ;.............WAIT FOR WDT TIMEOUT
RRF PORTB,F ;.............TURN ON LED TO RIGHT
BTFSS PORTB,0 ;..........REACHED RIGHTMOST?
GOTO RIGHT ;..............LOOP IF NOT
GOTO LEFT ;...............START NEW CYCLE
END
.......................................................................

If I change the value of
MSB EQU 3
to
MSB EQU 2

This should only give me 3 leds chasing instead of 4.
These 3 leds are of course included in the one package with 4 pins.
This works fine but the change between colours is too fast and the change is on, off and not a slow fade.

I know I need to include a delay, something like this...

Delay1 MOVLW 82H ;...130 loops
MOVWF 1A
Delx DECFSZ 1B ;........256 Increments
GOTO Delx ;...............2uS instruction
DECFSZ 1A
GOTO Delx
RETLW 00

Do I include this after left sleep and right sleep as follows..

LEFT SLEEP ;............WAIT FOR WDT TIMEOUT
RLF PORTB,F ;...........TURN ON LED TO LEFT
CALL Delay1 ; ..........Start delay loop
BTFSS PORTB,MSB ;...REACHED LEFTMOST?
GOTO LEFT ;.............LOOP IF NOT
RIGHT SLEEP ;..........WAIT FOR WDT TIMEOUT
RRF PORTB,F ;..........TURN ON LED TO RIGHT
CALL Delay1 ; ..........Start delay loop
BTFSS PORTB,0 ;......REACHED RIGHTMOST?
GOTO RIGHT ;..........LOOP IF NOT
GOTO LEFT ;............START NEW CYCLE
END

I will try this soon but am not sure how to fade on and off.

Would I be better trying a completely different code altogether.

Any help appreciated.

Thanks.