KCPO - It Is Still In A Range -4/8/2013


Price fell through the important 2366 support on last Monday but went back up above that level again on the next few days. But that support level was breached again on Friday. The Stochastic, MACD and DMI are all negative. Price stays below the bottom band. So all these add up to a full bearish reading.  But as the ADX remains flat at 12's for the past 7 trading days, it is basically telling me that the market is not going any way yet. And also there is another support level at 2332. So I would continue to use the Stochastic to manage the trade. I am now placing a stop at the bottom band plus 2/3 points.

The weekly chart remains almost the same as last week's. The Stochastic is negative and falling but the MACD remains positive. The ADX went flat and prices get caught within the band. All these readings are pointing at a listless market. The DMI stays negative , but the D- has again hooked up. This is telling us that the bears are getting stronger.  The Bollinger Band remains tight and I continue to pay close attention to it as this is always warning us a powerful move is about to come.

This market has been range bounding since last mid September. The longer the period of sideway market, the more powerful is its next move going to be. The last time this market did a similar setup was back in 2005 where it drifted for almost one and half year before finally exploded to a historic high of 4,400+.