KCPO:- Let's Wait And See Somemore 12/4/10

 

As I was saying last week that we should wait for 1-2 weeks to determine our next course of action. Last week prices broke below the lower Bollinger Band one day and then broke above it on another day, then came last Friday when the open and close action fully engulfed both the upper and lower Bollinger Band all in one day.

The Stochastic has turned positive again while the MACD seems to be struggling to do a positive crossing up. Maybe you want try your luck by buy in at 2596, but I would not commit a heavy sum as the ADX remains flat and the Bollinger Band continues to tighten, so we may expect this market to whip up and whip down again before the real direction emerges. Place stop at 2550.

 

The weekly chart remains bearish as the Stochastic is still falling and so is the MACD. As the ADX remains flat, Bollinger Band continues to tighten and prices stuck between the band, all of which are telling us that there is no directional trend in this market.

As last discussed last, I am getting very excited with the tightening Bollinger Band with low and flat ADX which are all classic signs that a violent major move will be coming  soon. But these do not foretell us which direction will the market next go. So we would have to look at other items to try to 'guess' educatedly on the market's next move. I mentioned here last there may be an inverted Head & Shoulder pattern forming , if that is true, then the next move should be a major up move when the neckline is broken up. But then we do not have any divergence to support this upside reading. So I would sit aside and wait for more evidence to emerge.