KCPO - Take profit first - 26/10/09

My previous stop of 2112 was not hit, so the long positions stay. Now the question is :- should we take out the positions at around 2267 ? I think it is a difficult question as the Stochastic has already gone into the overbought zone. Since the ADX is still continuing to fall and now it is below 20's level, so I would watch the Stochastic rather than on the MACD. But the D+ has now crossed up above the D- which is confirming the bull. This crossover signal is also being confirmed the "extreme point rule" which is the 2nd day prices must be higher than the crossover day's high. And I also like the part where the MACD has now crossed up above its zero signal line which is usually a more reliable buy signal.


The weekly chart Stochastic has already crossed up but the MACD remains negative and so is the D- which is still above the D+. But prices has now able to close above the middle Bolliner Band which is effectively the 20 periods moving average. So what we have here now is 2 bearish indicators, another one and price are positive. A contradiction. This is being further confirmed by the falling ADX which is now at 15's.

Summarily , with a falling and daily and weekly lowly ADX, I would suggest you should take out the longs at high. At present, I would use the Stochastic to generate buy and sell signals as the ADX is low. I think this market may consolidate for a while before taking the next major direction.