FKLI - Stay Long But Stay Close To The Fire Exit 5/4/2010

Last Monday the market went above the upper Bollinger Band and I raised my stop to 1318 which was taken out on the next day. This is just another one of those hiccup market situation that has not being going straight up/down. But I bought again when it went above the upper Bollinger Band again. I would now place my stop at 1326.

Both the MACD and the Stochastic are rising, even the ADX has followed suit. All these are indicating a trend may has returned. But my attention is still focussed on the MACD where the bearish divergence is still intact.

 

The weekly chart MACD has finally turned positive but as in the daily chart, the bearish divergence remains intact. Since the ADX remains flat, we must pay attention to the Stochastic as it has gone into the overbought zone.

Since both the daily and weekly indicators are in agreement, so we would have to pay respect to the bull power, even though I remain as unconvinced as on last week. But in trading, we have to disregard our emotion and stay with the predetermined signals and act on them.