Sunday, June 15, 2014

FCPO - A Rebound Finally Come - 6/16/2014

Displaying OD FCPO D.png 
My short trade was closed off on last Thursday when price went above the bottom band. I have been expecting a technical rebound for the past 2 weeks and it finally comes on last Friday. Price went close above the bottom band with the Stochastic turning positive and it also went above the 20's level. The MACD has also turned positive but since it is relatively "far" from its zero signal line, so I would not get too excited and pay too much attention on it yet. Please take note that there is a minor bullish divergence formed at the Stochastic which it usually mean a sizable retracement. Though the DMI remains negative but the D- has crossed below the 30's level. This is telling us the sellers are leaving the market and closing off their positions. The D+ has crossed above the 20's level and this is telling me that the buyers are regaining their confidence and begin to buy in. The ADX which has been above the DMI which means the market is oversold and it has begun to fall. This means the prior cycle has ended.

Displaying OD FCPO W.png 
The weekly chart is still bearish biased as the MACD continues to fall and it is below its zeros signal line. This means the bears are in control. The Stochastic has hit a bottom at 7's and seem to be trying to turn around. But it has not yet, so do not get too excited over it. The DMI stay negative but the D- has fallen back below the 30's level, this is telling us the sellers are not as confident as they were. But unfortunately the D+ is still falling, so this is telling us the buyers are still reeling in pain and dare not face the sellers. The Japanese Candlestick is another small body type and failed to confirm a reversal over the previous week's Doji Star. So I have to wait for another week to see what comes next. As far as price stays below the bottom band, it is  still a bear dominated market.

What is happening at the daily chart now is merely a technical rebound as there has been NO evidence that the market is having a major reversal. So I would allow myself to get carried away by the El Nino ravings. The current rebound should be a profitable trade.

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