FKLI 1/6/09 - Remain cautious

As same as the previous week, I would continue to be cautious on the long positions as prices reach new high but the MACD has not. Unless this bearish divergence is erased, I think you should be quick in taking your profit off the table.


The weekly chart is telling us something else as the previously sleepy ADX has begun to rise which is confirming a trend is in this market. The MACD has crossed up and remain above its zero signal line which is usually more bullish. And as long as prices remain above the top Bollinger Band, I cannot find any evidence that this bull is dead.

But since the daily chart is not too encouraging, you should place your stop at 1031 to protect your profit. Since market has already reached the 1,060, its next upside target would be 1,110