FKLI - A Week Of Jaw Dropping  Action -4/8/2013

My long position was taken out when price went below the top band on last Monday. But it did not trigger any new shorts signal as both the Stochastic and MACD remained positive. I went back in and engaged a new long position when price went above 1679 on Tuesday. Again it is "kicked out" on the next day when price collapsed when Najib finally made his long overdue announcement. That particular day most probably hurt many traders as after the initial collapse , price went back up again. This time of action can only benefit the traders if they are also trading the intraday chart. It was really frustrating , especially the last few trades have not been profitable. But by following my trading system, I went long again on last Thursday when price went above 1688. I am not placing my stop at the top band minus 2 points which is 1675. Since the Stochastic is already overbought, I would also use the prior day low minus 2 as my stop. This is depending on whether the top band or the prior day low is higher as to limit the loss or squeeze whatever profit is in there.

Please take note that the ADX has now fallen to 15's and the Stochastic is already inside the overbought zone and has turned negative, so I would advocate a very tight stop. The DMI has already turned negative.

Last week I mentioned if I am trading the weekly chart, I would buy if price goes above he prior week's high of 1679. This week price actually fulfilled that condition. The Stochastic, MACD and DMI are all positive Price closed above the top band. All these are strengthening the bulls. The only item left mindful is the flat ADX at 15's which is not confirming a new trend yet. The multi periods bearish divergences are still intact, so I would NOT want to get carried away too much. Let's face it, it is not that difficult to use the 30 stocks index to fool around with FKLI. Someone always want to show others that our nation's fundamentals are strong , thus the stock index should reflect so. This is especially at this crucial time. You may ride with it but just make sure you do not get sucked into the abyss.