FKLI 2/3/09 - Big moves to follow ?

The daily ADX continues to fall and last gone to 9's and the Bollinger Band continues to squeeze. If you are those position traders, I would advice you to stay aside first until a more significant signal come forth. But if you really want to trade , then you should watch what the Stochastic would do next for a new signal. But I must warn you that with such a lowly ADX, you most probably would find it difficult to make a decent profit from the trades.

I have marked out 2 horizontal lines to watch out for any breakouts before deciding which side of a trade to take.

On the weekly chart, both the Stochastic and the MACD continue to be positive and rising which should be telling us this market is still bullish biased. But mirroring its daily chart, the weekly Bollinger Band has begun to squeeze. This is confirming to us that there is no trend in this market. If you have been following my past essays , you would know I always get excited whenever I see a Bollinger Band squeezing. This is because the squeeze usually forewarning us that a major move is in waiting. But at this time, I will sit quietly and wait. The wait will probably end when I see the weekly closing above the upper Bollinger Band of 903, but I would prefer it to close above its previous weekly high of 906.

On the coming week, DPM will announce his mini budget which I doubt very much he can deliver much surprises other than the usual public projects spending, a little cut here and there. But the local funds will most probably react to this. So sit tight, you should stick to what the charts are telling us for your next course of action and ignore the market 'experts' analysis.