FKLI:- Get Ready To Take Profit 21/6/2010

My stop at 1288 was taken out on lat Tuesday, but I would re-engage new long position on the next day when price went up above the upper Bollinger Band. The Stochastic has now gone into the overbought zone, so we would want to be more cautious on our long positions. Since the daily ADX is falling near the 20's signal line which is warning us whatever trend in this market is fast fading, so I would keep my stop at yesterday's low minus 2 points to protect profit , i,e at 1308.

Though the MACD is still rising but since the ADX is falling, so I would keep an eye on the Stochastic more. When if Stochastic is to cross down its 80's level or price crossing down below the upper Bollinger Band, I will turn short again.

The weekly chart is still bearish as both the Stochastic and MACD remain negative; the D- is still above the D+. The falling ADX with prices stuck within the Bollinger Band are telling us that this market is in a trendless mode. Watch out for prices to go outside the upper or lower band for new direction.

In the weekly chart, the current up move may be forming a right shoulder to complete an extreme bearish head and shoulder pattern. And remember the bearish divergence at the MACD is still intact. If it is really the case here, then you should really turn off any remaining bullish thinking in this market.