Monday, September 29, 2014

FCPO - It Is Getting More Bullish - 9/29/2014

My previous long position was closed on last Monday as price went below the prior day low. But price did not go further down but instead it went upward again for the next 3 days. Last Friday saw price stalling again. I bought in again on last Tuesday when price went above the prior day high and I have maintained my stop at below prior day low. As price has now closed above its recent fractal high of 2173, the market is getting more bullish.
The MACD continues to go upward and it is now above the zero signal line. This is an important development as this means the market may be going back into a bullish cycle. The Stochastic remains positive but inside the overbought zone, so caution is warranted. The DMI remains positive and an important item has just happened - the ADX has stopped falling and gone flat. This may foretell a beginning of a new cycle. 

The weekly chart's bear has finally conceded defeat as price has closed solidly above the bottom band with the Stochastic crossing up above its 20's signal line. This is the first buy signal since March. Though the MACD is still negative but it is obviously turning around and we may see it turning positive by the coming week. The slower reacting DMI stays negative but the D- continues to fall, it is confirming the sellers have been rushing to the exit door. But the D+ is still unable to cross above its 20's signal line, so the strength of the buyers are in doubt. The most important development is the ADX, it has finally begun to fall which is always my most reliable confirmation for the end of the prior trend.
As there is no special confirmation of any major bull, I would still call the current move as a technical rebound. I would first look at 2,300 level as the first target.

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