Saturday, August 16, 2014

FKLI - Market Waits For Next Sell Signal ? - 8/18/2014

After the previous week's slam down, the market began to recover from the shock. I had placed my stop at the prior day high and it was taken out on last Tuesday. Price has now climbed back above the bottom band on last Wednesday and the Stochastic also has turned positive on the following day. I bought again on last Friday as price went higher than the signal day high. I will place my new stop at below the bottom band initially and if the market cannot go higher , I would adjust my stop to the prior day low.

The Stochastic has turned positive and been rising. The MACD has also turned positive as on last Friday, but it is still below its zero signal line. The DMI stays negative with the D- falling back from the extreme level of 44's. When either D+ or D- goes too extreme (which is beyond 40's), it is always prudent that you should tighten your stops. The ADX has turned flat which is telling us the prior trend is taking a rest.

At the moment, I would not say the selling is over unless I can see price closes back above its recent fractal highs of 1877 and 1884 which have became its resistances.

The weekly chart Japanese Candlestick closed back above the bottom band which is telling us the market is not willing to yield to the bear, at least not yet. But all the 3 indicators remain bearish as the Stochastic is still falling and now reached its 50's signal line. The MACD stays negative and is still falling. The DMI is also negative but the D- has dipped which reflects the sellers are getting jittery. The ADX stays flat which mean there is not yet a strong trend in the market. I would become bullish again when if price can close back above the top band.

As I last written here, I expect a sideway or an even a smallish rebound before the market starts to fall again. But for that to happen , price would need to go below 1833. For the time being, a sideway market would be more likely.

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