FKLI - Bears not completely in control yet - 24/8/09

The market hit our stop of 1170 on last Monday and triggered a new sell signal. Both the MACD and the Stochastic have turned negative and continue to fall. Though the D+ is still holding above the D- which is the last remnant of the bull cycle but the falling ADX is confirming the prior bull trend has finished.

But as I had pointed out that since the MACD is still relatively "far" from its zero signal line, I am not too convinced yet as the bear is strong yet. This is especially when prices have gone below the lower Bollinger Band but has now closed back above it. Even though it is still more bearish biased now, I would place a stop at 1165 to protect profit. Buy again if it closes above 1173 or sell again if it closes below 1150.


Again weekly chart is still offering no bearish signs yet as the MACD remains positive and prices stay above the upper Bollinger Band. The ADX has just turned flat indicating a 'rest' in the bull trend. But there is something tacit formation occurring at the Stochastic which has just formed a minor bearish divergence (lower peaks while prices make higher highs) So I would begin to take some extra caution as from now onwards.