Tuesday, November 4, 2014

FKLI - Market Imitates The DJIA and NIKKEI - 11/3/2014

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The market continues to move higher and took out the upper band on last Wednesday. This is further confirming the current bullish trend. The MACD continues to move higher and it is getting nearer to its zero signal line. The Stochastic is fast getting into the overbought zone, with the ADX flat at the moment, I would want to pay more attention to this indicator over the MACD. The DMI is positive with the D+ swinging above the 30's line. This is telling us that the buyers are strong. The ADX has stopped falling and turned flat, this may mean a new cycle could begin soon.  I am placing my stop at either below the top band or past 2 days low. This will depend on the current price bar action.

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The weekly chart continues to improve and price has now closed above the bottom band with the Stochastic turning positive and gone above 30's . This has confirmed a new buy signal at the weekly chart.ANd if I am trading the weekly chart, I would buy if price can go above 1855 in the coming week. The MACD stays negative but began to turn around. The DMI also stays negative but the D- has begun to fall from its extremity and is now below 30's signal line. This is telling us that the sellers are getting out fast. The D+ has just crossed above the 20's signal line. So this confirmed the buyers are returning. As in the daily chart, the ADX has turned flat. So this is signalling the beginning of a new cycle next.

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The monthly chart's indicators are still falling. But the MACD is still above its zero signal line and the Stochastic is above its 80's signal line. So I cannot yet say the monthly chart has gone over to the bear. And the monthly Japanese Candlestick has formed a long legged Doji and this is after testing the lower band and price rebounded. So by the candlestick pattern alone, I would think it is a very bullish sign. The DMI is at an equilibrium, both the D+ and D- is at 20's, so I need to see which one of these 2 will have an upper hand in the coming month.

Summarily, I am still considering the current situation as a technical rebound and the bearish formation is still there. Of course with the current strong up moves in US and Nikkei market, who can blame our market from doing a monkeys see and monkeys do ?

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