FKLI - Return of the bull ? Remain cautious -19/7/09

None of my laid down conditions calling for a sell materialize last week. The Stochastic did not cross below the 50 signal line but instead cross up again. The MACD also did not cross down its zero signal line and instead crossed up again. And everything else have suddenly turned bullish:- the D+ has also crossed up above the D- ; prices closed solidly above the upper Bollinger Band and also above the recent highest high. Perhaps the most significant item is the ADX which has begun to rise, which may be signaling the return of a strong trend in this market.

You would had placed in some long positions with all the abovementioned confirmations by last Wednesday. BUT with the bearish divergence still intact, you should NOT be too carried away with this new direction unless the divergence is taken out. By that you would need to see a higher peak formed at the MACD than its prior peak.


The weekly chart remains positive with price closed above the upper Bollinger Band and its prior high.

The immediate upside targets should be 1168 and 1255. Place your stop at 1092.