KCPO - The Bears Gaining Strength ? -7/30/2012

Last week's suggestion of "allying yourself with the bears is of more prudence" turned out to be rewarding. Price went below the lower band and triggered another sell, but again the trade turned out to another short lived one. Price went above prior day high on last Wednesday and effectively took out the trade. If you had managed to stay on the shorts trade, then using prior day high plus some would be a prudent way to manage the trade from here on.

The Stochastic has gone into the oversold area and looks like it is hooking up. The MACD remains negative and the ADX has been rising and it is now above the 20's. So I would suggest you should also pay more attention to the MACD over the Stochastic. In order to buy , I would want to see price crossing above the lower band with the Stochastic crossing above the bottom band.

 

The weekly chart's initial bull has failed to sustain as price closed below the lower band again. The MACD has turned downward again while the Stochastic remains positive but has sopped rising. Prior support of 2838 is vital. Though the ADX remains flat but I am alerted about the out expanding D- as this may be an initial show of strength for the bears.

 As the month is coming to a close by the coming week, where price closes eventually on the last trading day would be crucial. And if price is unable to go back up above 3,000, then it would trigger a long term sell signal at the monthly chart. The support of 2838 is important and if it is broken , we could see the emergence of a vicious bears.