FKLI - big down moves soon ? 10/3/09

Last week I used 2 horizontal lines to mark out the recent range and commented that we should trade on any breakup or breakdown. This is exactly what happened, price went down below the prior range on last Monday and stays below it. The daily Stochastic continues to drop while the MACD has also fallen below its own zero signal line which add on the overall bearishness. You should also pay attention to the ADX which is now rising and fast approaching its 20 signal line. It is because its previous lowest value was at 9, the increase of its current value of 14 is warranting a trend may be in formation.If you have sold this market, place 875 as stops.


The weekly chart's Stochastic has already crossed down which may be taken as an initial sell signal. The MACD still remain positive for the time being. An important item to pay attention is that the weekly ADX has stopped falling and turned flat. This is signalling that the prior trend (up move) has ended. We should watch if price closes below the Bollinger Band bottom, then it is confirming another bear move is in business.

Last week I also mentioned about the Bollinger Band squeeze that it may be bring explosive move. So we should be careful that the explosive move may be a downward move. Price could fall to 780.