FKLI - Caught in a range - 31/8/09

Our stop of 1165 was taken out and a new long signal was also triggered at the same time on last Monday. Though the Stochastic has turned positive and rising but the MACD still has not follow suit. So we have here another classic show of 2 indicators that do not agree with each other, which is an usual sign that the market has not resolved which direction it wants to take. With the ADX continues to fall and prices remained stuck within the Bollinger Band, I would read all these as another sideway market. I have drawn 2 short horizontal lines to mark out its possible range. Any breakup or down may be taken as the beginning of a new directional move.

Since the D+ remains above D- which is more bullish biased, so I would look out for a breakout above 1189 which is its recent fractal high as a further reason to add on to the long positions. And I would keep 1160 as stop if the market turns around and fall. Any closing below 1147 should be taken as a new sell signal.


The weekly chart again has not shown any sell signal yet. Prices still remain above the upper Bollinger Band while the MACD is still positive. The Stochastic maintains above its 80's signal line but may be flashing a minor bearish divergence formation (lower peaks when prices reach new peaks). You should pay attention to this indicator if it crosses down its 80's signal line or 1149 support as the initial signals of any weaknesses.

The market may continue to hold around here before any major sell off happens. I am saying this because there are so many of those penny stocks/near death stocks that are ripping and roaring for powerful run. So I do not think the people in power may not want to dampen the mood at this point. Having say this, you MUST still insist on your stops.