FKLI:- Charts Turning More Bearish But Still No Strong Selling, yet. - 12/20/2010

 
The market flashed a sell signal on last Wednesday when price closed below the upper Bollinger Band complimented by a Stochastic crossing down its 80's signal line. The MACD has also gone negative. The ADX remains flat which is telling us a strong trend is still not formed yet. The bottom band seems to be offering a good support last Friday, so if price is able to break below that level, I would think the sellers would gather more strength. Meanwhile place stop at 1512.

You should take note that this market has now formed a lower high, so if it starts to form a lower low, then a bear cycle may be in force.

 

The weekly chart has also turned more bearish as the Stochastic has now crossed below its 80's signal line which offers an initial sell signal. The negative MACD continues to fall. Unlike the previous week, price has closed below the upper Bollinger Band  this week. This could be taken as another initial sell signal. The only positive item is the D+ remains above D- which may be interpreted as a saving grace that the bull cycle may not be officially over. Take note the ADX is also flat, so there is still no great trend in this market.

At this moment, both the daily and weekly chart seem to be in agreement for a sell. The only item lacking is a trend. So we may continue to see the market correct itself downward a bit a day and then go back up another day. But I am watching the lower Bollinger Band support as a more confirming signal that the bear may begin to flex its muscle.

Fundamental items to keep an eye on will be the 2 Koreas and whatever next coming out from the Eu-land. The USD has been caught up in a range for the past 1 week, but the overall bias is still pointing for a major rally which would mean equities markets should suffer. 2 out of the past 3 years, USD seems to like make its big move near to Christmas day.