CPO - Stopped out but not bullish yet - 19/7/09

Everybody should know where his stop is before he places in a trade. I was quite confident that this market will continue to fall last week but it rebounded strongly by Wednesday. Our stop was taken out but you are able to keep your profit and did not have to get anxious about the trade.

The indicators have begun to change. The Stochastic has crossed up above its 20 signal line which is offering an initial buy signal. So has the price which has closed above the lower Bollinger Band which is also an initial buy. The MACD has crossed up its moving average, but since it is still 'far' away from its zero signal line, I would not get too bullish about it. Another indicator that has not confirm the return of the bull is the D+ which is still below the D-. The ADX is now above the D- and has started to fall, this is telling us the prior bear trend has stopped , at least temporarily.


The weekly chart is not pretty yet as both the Stochastic and MACD are still negative and remain falling while the D- maintains above the D+. The only arguably "bullish" sign is price managed to close above the lower Bollinger Band.

You may want to venture in some initial long contract based on the Stochastic and BBand signals, but you should keep a tight stop at 2037 because a positive MACD that is 'far' from its zero signal line is usually unreliable. We may see the market reverses again and resume for its prior bear target of 1900.