Sunday, May 4, 2014

FKLI - More Flip Flop - 5/5/2014


Just as I feared, last week's new sell signal turned out to be another dud. Price gapped down but closed all the way up. This price action alone would be regarded as a reversal signal. I changed my mind and instead choose to close off my new shorts on the next day when price went above 1857. This is also because I jumped the gun and went short without a confirmation from the Stochastic which has been staying positive all the while. The short trade was a mistake so it must be rectified at the soonest to limit losses. Price went further higher on last Tuesday and closed above the top band, thus flashing another new buy signal. The buy signal was not been confirmed by the Stochastic until last Friday. So the trade plan would be to buy on the coming Monday when if price can go above 1867 which is the signal day high or if you want to play it safe, buy when if price can break above recent high of 1868.50. After long trade is engaged, place stop at below the top band.

The MACD and DMI are positive. But the ADX stays flat at 10's which is an extreme low level. So I expect the market to stay listless for a while. The bearish divergence mentioned here is still intact, so I would still favor a sell strategy over a buy.


The weekly chart's MACD and Stochastic stay positive and continue to rise. Price briefly went below the top band but was able to close back up above. It did not go above the previous day's high. The flat ADX continues to stay flat at 16's for the 7th week which reflect the lack of momentum. The D+ of DMI  dips its head which is reflecting the buyers are hesitating. An important item that warrant our attention would be the Stochastic which has now gone into the overbought zone. Since ADX is low and flat, Stochastic will be the indicator that is significant now. 

At the monthly chart, the Stochastic stays positive but it is overbought. The MACD stays positive but is 'flat" which is backed by the flat ADX which has been staying low at 18's. Price has not been able to go higher than its recent high of 1877. So as in the other time parameter charts, this is also telling us that the market seems to be fizzling out.

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