FKLI - Sideway But Don't Fall Asleep 26/4/2010

This market is caught in another one of those range bounding situation. Prices is contained within the upper and lower Bollinger Band which the falling ADX is offering their confirmation. While the MACD continues to fall with the gap with its moving average is still widening, the Stochastic has already staged a positive cross up. With 2 contradicting indicators, it is again offering another confirmation to a sideway market.

If you are still holding onto the previous long contracts, then place stop at 1346. At this time, you should not trade big as there is no trend yet. Use the red horzontal line I have marked out on the D+ recent peak, any D+ or D- break above that level would warrant for new or additional decision.  The Bollinger Band has started to tighten and the current price consolidation are telling us this market is preparing itself for a sizable move is ahead. So you should sit up and keep both your eyes wide open.

The weekly chart flat ADX is confirming the lack of trend in the daily chart. The Stochastic remains positive and rising. The MACD, though positive, maybe is making its turning soon. But as long as price maintains above the upper Bollinger Band, I cannot find any concretely bearish about the chart.

So you can either maintain your earlier shorts positions until it hits the stop or you may want to decide close them off until another a more solid signal appears on the scene. But overall, the earlier discussed bearish bias should be maintained unless the divergence is erased.