FKLI - It Is Still Listless But Is Something Coming ? - 4/16/2012

If you have taken a short at 1589 which was the middle band as I wrote here last week, you would be frustrated when the market went back up and took out those position when it went above the upper band on Thursday. This is one of those things when the ADX is below 20's and falling , it always mean many false signals that would result in series of losing trades. Though by Friday prices went above the top band but it failed to close above that level. On top of that the Stochastic and MACD remain negative. So I did not do any new trade.

So thoughI am reluctant to engage in new trade but of course if price goes above the top band again and that can be accompanied with a positive Stochastic, then I would have to stick to the trade plan and engage a new long trade. But with the lousy ADX, you would either keep the stop very tight as to limit the losses or place them further so the engaged positions would not get whipped and pray hard that eventually the trade would work out in your favor. The first approach is for those traders with smallish capital and the later approach is more for those traders with deeper pocket.

Though there are still chances that we still may see  prices creeping further up and it would just make the already omnipresent of the bearish divergence even worse. I take note that the ADX has stopped falling and turned flat, I am pondering whether the market is getting ready for a new move ?

 

The weekly chart is more or less same as the last week's. The Stochastic is negative but it is still holding above the 80's. The MACD and DMI are positive  and price holds above the top band. All these 3's is supporting the bull. The Bollinger Band has begun to tighten and ADX remains flat for the 5th. week. So the conclusion is that everybody is waiting for some new leads into a new direction, meanwhile the players just whistle to pass time.