Monday, May 19, 2014

FCPO - Was It A False Breakup ? - 5/19/2014

Last week I mentioned the market could be near the end of its bear cycle and there is a possibility that a new bull cycle could begin soon. The market presented a new buy signal on last Wednesday when price closed above the bottom band with a confirmation from a positive Stochastic that crossed above its 20's signal line. The buy signal was confirmed on the next day when price went above the signal day high. But price came back tumbling down on last Friday and closed below the bottom band. If your risk appetite is not strong, then I would think you should place a stop at below Friday's low. Otherwise below the last low of 2552 should be logical.

The MACD and Stochastic stay positive, but the MACD is still below its 50's signal line which is not too bullish yet. The DMI stays negative with D- rising again. This means the sellers are coming back again. The ADX has just gone flat after falling for a few days. The falling part means the prior trend has ended, but now by turning flat, it would mean the "end of prior trend" may has a second thought.

If price can just maintain around here without falling again, especially without breaking through the 2552 support level . Then my previous week's bullish view would still stand, otherwise, this market may just go further down to a new low. Of course it would all depend whether the indicators follow.

AT the weekly chart, both the MACD and Stochastic are still falling and negative. The DMI stays positive with the D+ stays flat which means buyers are indecisive. The D- is falling and this means the sellers are getting worried and quitting. The ADX continues its fall and it is now below its 20's signal line. This means there is little trend in the market. Again the most interesting item found here is the Japanese Candlestick as it is an inverted hammer. When they are found at around a bear cycle, they would mean a possible reversal can happen next. Of course it would all depend on the coming week's Candlestick.

The US Dollar index after staging a dramatic breakup after the previous week. It continued to push up a bit and then consolidate. But it has already broke above its recent fractal high, so there is chance that it may be getting ready to do another powerful move. And I sure hope they can encourage FCPO to follow suit.

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