FKLI - We May Still See a Technical Rebound in A Bigger Bear Cycle -2/18/2013

The market came back from the long holiday with a gap up and took out my stop last placed at the bottom band plus 2 points of 1619. On the same day it also flashed a new buy signal with price closed above the bottom band  and a confirmation from the Stochastic which turned positive. But the following 2 days failed to meet my usual filter which is to buy if price breaks above the signal day's high. So the latest buy placement would be at 1627+2 on the following Monday.

The Stochastic has turned positive and continues to rise. There is a mild bullish divergence formed here with a higher troughs and a lower prices. Though divergences formed at Oscillators are usually not as powerful and meaningful as those formed at MACD, yet this still warrant some attention. The MACD and DMI still remain negative. But the ADX which went flat above the DMI is telling us the prior sell trend may has ended.

The weekly chart remains more bearish biased as both the Stochastic and MACD are still negative and continue to fall. The Stochastic has already reached its 50's signal line which warrant more attention. Prices though went back up above the bottom week at first but failed to hold and is now closing below the bottom band again. The DMI remains negative and the ADX is still rising which may be pointing at a beginning of a new trend.

The daily chart may be flashing a new buy signal soon but the weekly chart is telling us to sell. As many traders may not be back from holiday yet, I think the real action would only come in the coming week or next.