FKLI:- A Little  Short Term Upward Bias 14/6/2010

Last Monday the market opened gap down and passed through my stop which effectively took away all the profit. But it is just another one of those things that happen in tradings. Since the Stochastic and MACD remained positive and price did not went below the lower Bollinger Band, I did not initial any new sell position but instead I went back to buy when price broke above the middle band.

As the ADX continues to fall, the current move may be one of those minor short term move, again I prepare to take profit at the slightest sign of trouble. I will keep stop at 1288 which is slightly below the middle band which is also the 20 days moving average. If the Stochastic climbs higher in the coming week, I would advocate you move up the stop to the previous day low minus 2 points as stop.

Both the Stochastic and MACD at the weekly chart remain negative and continuing their fall. But so is the ADX which is confirming the lack of trend . Price has been staying within the Bollinger Band for the past 3 weeks. Any breaking above upper band or below the lower band will signal a new move.

With the falling ADX and accompanied by the tightening D+ and D- at the both the daily and weekly chart, I think the market is going into another range bound situation as I think the main players seem to be not sure what to do next. If price can close above the upper Bollinger Band again, I think there is a chance that we may see one more round of buying as at this time the DJIA also seems to have found a temporary bottom. Maybe the PM's just announced new deals will work up our local fund managers (so what is new ?) But with the falling ADX, whatever up move may be just another one of those blips.

Fundamentally speaking:- there is nothing much around the world that allow us to get happy yet. As more bubbles getting ready to burst, trade protectionism is again rearing its ugly head and with the cooperation of the major Arab country , there are new signs that Israelis may be preparing to attack Iran soon. (such irony - while Malaysian Muslims have been so busy in demonstrating their blind hatred towards Israel, their Arab brothers are rushing in to assist them to attack another Islamic nation!)