Sunday, June 29, 2014

FKLI - Is A Top In ? - 6/30/2014

I bought in again on last Monday when price went above the previous Friday's signal day high. By last Friday I  closed off the trade when price went below the prior day low. The logic behind this is that the Stochastic is already getting overbought (because the ADX is low) and as explained in the past few essays, because of the bearish divergences I have been more bearish biased. So I would take quick profit on the buy side.

The Stochastic has crossed down but I would wait for it to cross down below the 80's signal line together with a price closing below the top band for considering a new sell position. The MACD stays positive but seems to be turning downward. The DMI is still positive but the D+ has crossed down below the 30's signal line which is telling me the buyers are quickly getting out of their long positions. The D- has risen, though it is still below the 20's signal line, it is still hinting to me that the sellers are getting enthusiastic . The previously rising ADX has gone flat for the last 2 days, this means the prior trend may has ended.

The weekly chart remains siding with the buyers. Price maintains above the top band. The MACD, Stochastic and DMI are still positive. The D+ went up again after falling for a few weeks, this means the buyers are getting strong while the D- is falling. The ADX is still rising, but since it is still below the 20's level, so I would not pay too much attention to it yet.

But there is an item here that may warrant attention and that is the Japanese Candlestick of a Shooting Star. When this appears at an uptrend, this may mean the bear may be covertly staging a takeover. In this case now, I suspect a top may in formation. But I need to watch what kind of Candlestick will appear in the coming week, if we get a large black body candlestick, then it will confirm a market top.

As I have been writing here for the past few weeks, I do not believe what the fundamental analysts have been raving about this market. I remain firmly thinking that the market is due to "die" soon as all the "death" signs are written all over  the charts.

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