FKLI:- Successful Breakup - More To Come ?- 07/04/2011

 

We finally have a breakup above the 1569 last week which met my reading of ascending triangle formation. And the ADX has now risen above the falling D- which is confirming the beginning of a new trend. If the ADX continues to rise above its 20's level, we may see the bulls bring in more powerful moves. As the Stochastic is in its overbought zone and last Friday's candlestick is a hangman, so we may see a temporary consolidation or retracement. But as the ADX is beginning to impose its strength, so I will prefer watching the MACD over the Stochastic.

The market may has effectively changed the overhanging bearishness as the bearish divergence formed earlier has been erased.

 

The weekly chart is again moving toward a more bullish biased as price closed above its previous high of 1579.50 (14/1/2011) while MACD has turned positive and turning upward. Even the DMI has begun to expanded outward with D+ above the D-. I take note the D+ has gone above its recent several peaks during the month of May and June. Though the ADX remains flat at 10's, I think we may start to see a new trend soon.

But a word of caution here, as prices may have registered a new high, but the MACD has not. So that is something to keep an eye on.

Fundamentally the Greek crisis seems to has "settled" for the moment but many still take this as a mere postponement of the problem. Last week's Germany and French banks willing to take a 70% rollovers of the Greece debts say it all - their banks will be greatly inflicted if Greece defaults. Their exposure to Span, Italy and Portugal is also gargantuan. And that problem persists.