FKLI:- It Is Back To Buy Again; But I Remain Unconvinced 29/2/2010

This market is getting tricky again as it broke below the middle Bollinger Band which is effectively the 20 periods moving average , then went back up above that critical level on the next day. And that is followed by a closing above the upper Bollinger Band on last Friday.  With the Stochastic turned positive and rising again, I closed off my shorts and turned long again on Friday. The MACD has also turned positive while the D+ remains above the D-, the current story is back on the long side again. I am placing my stop at 1304, if the market continues to go further up, then I will raise my stop to 1318.

Taking note that the daily ADX has gone flat which is telling us the trend is weak. And as read in the previous week's weekly chart, this market may be caught in a range bound situation (weekly MACD and Stochastic contradicts each other/ falling ADX.) So whatever I do at this stage, I would NOT want to engage a big position in yet, until I see more evidence that a new trend has emerged.

The weekly chart remains uncertain as both the indicators still contradict each other. Though the MACD may has hooked up but it still remain negative. The weekly ADX has stopped falling and becomes flat. We need to watch further whether this would develop into a new trend. But I would watch the Stochastic as it is getting near the overbought zone.

Our market as usual , shows its "resilience" to outside forces. Despite claim of the Greece problem is "settled",  I am getting even more cautious with what is brewing over in the Club Meds , the PIIGs and China. I see very little reason to feel bullish about the equities markets.  Recently a  bank just launched their new China Fund ,  hyping about how "bullish" the China market is in their marketing news releases. I do not think their boys have been really doing their homework, especially when the Shanghai Stock Exchange Composite Index (SSEC) chart's major moving averages have just done a 'death cross". Buying in at this period is truly irresponsible to their unit holders. And on direct contraction to what everybody is saying these days, my chart reading is showing a potential collapse in the Chinese RMB soon. Thinking that our market can avoid being getting "hurt" is pure naivety.