KCPO - The Bulls Ambush - 8/20/2012

Last week I wrote of a divergence and double bottoms formation was warning me of a possible reversal and the bulls did launched an ambush and pound on them.


 

Price went above the lower band with the Stochastic confirming with a positive crossover to above 20's level. The MACD also has crossed up on the same day. The DMI followed so on the next day. If price can close above the upper band by the coming week or close above its recent fractal high of 3007, then we would have the final confirmation that the bull is back in business. The ADX has begun to fall which is confirming the end of the prior trend. Any move that comes with a divergence is usually quite profitable, so you should trade it.

Price has managed to closed above the lower band at the weekly chart but the Stochastic has not  confirm . So  if you are trading on the weekly chart parameter, maybe you would want to wait for another week to get the confirmation from the Stochastic (always stick to the trading plan !!!!!) Since there is also a bullish divergence formed at the weekly's Stochastic, there should be a sizable gains with this trade, so do not get too bothered about missing some initial points here. I also take note that the MACD and DMI are still negative.

Last week I also mentioned about the fundamentalists' overall bearishness on this market based on the figures and statistics. So here we have another realtime kisah benar example that financial markets do NOT work like that. If you had entered or add on more shorts base on their "logics and reasonings", you would have now suffered a sizable loss.