CPO-18/5/09 - Bear returning soon ?

Price had closed below the upper Bollinger Band on last Thursday and Friday, so I would immediately take out my positions to take profit. As mentioned here last week, I was getting worrisome as bearish divergence are already formed at both the Stochastic and the MACD. This is usually warning us strong selling could just be around the corner. On last Wednesday, prices popped up and hit 2799 without closing above it. This has now formed another extreme bearish chart pattern called a double tops. The ADX has also started falling while above both the D+ and D- which is confirming to us that the prior bull trend may has already ended.


As in last week, again the weekly chart candlestick jumps out at you. It is again one of those not too nice type. A Doji star gaps above or below the previous bar which should signal reversal with the next bar. Or we could also call it a long upper shadow which is typically bearish especially when it occurs near a high price level or at a resistance level or when the market is overbought. But then again we are not yet getting any other confirmations as the MACD is still rising and above its zero signal line; the ADX is still rising and prices maintain above the upper Bollinger Band. So we are NOT getting any complimentary sell signal to back up the daily's sell signal.

With the daily MACD, Stochastic negative cross down and prices crossed down below upper Bollinger Band - you would had placed in some initial sell positions. Keep 2758 as stop. With all the above mentioned powerful bearish signs found in the daily chart, I would enthusiastically add on more positions for more aggressive sells once the weekly chart's confirmation kicks in.