Saturday, April 19, 2014

FCPO - Reversal Came But Players Remain Unsure - 4/21/2014


The market reversed as I expected earlier and went above the bottom band with the Stochastic turning positive and went above its 20's level. During the middle of past week, price even went above 2671 level which really excited me. But price has failed to sustain and came back down only after holding above the level for one day. I must confess it was a huge disappointment and I closed off my long position after price broke below the middle band.

The Stochastic and MACD remain positive and rising. The MACD is relatively 'far' below its zero signal line, so I am not particularly too excited over this yet. The DMI remains negative and as at last Friday, D- is rising again as confirming the sellers are getting brave again. But at least the falling ADX continues to fall as a confirmation that the prior trend has ended, at least temporarily.

As the indicators are still positive, I would buy again when if price can break above either the top band or recent high of 2700. But I take note the Bollinger Band has already begun to tighten, so I suspect that the market may be going into another of its listless mode before the next new directional trend will happen.


The weekly chart remains bearish as before. Both the indicators are still falling. The Stochastic has just crossed below its 50's level which is adding more weight to the sellers. The DMI stays positive and has shown some sign that the buyers are returning as the D+ has hooked up while the D- is falling. But there may be a piece of evidence that may be signaling a possible reversal. The Japanese Candlestick is an inverted hammer which is now found at a 5 weeks long of bear cycle, this usually mean the sellers may has begun to get out of their shorts positions. But of course, the inverted hammer is just a warning/ a possibility. I would need to see the coming week's Candlestick to confirm a reversal.

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