FKLI - Stick with the trend - 22/9/09

My stop was not violated last week, so I would still be holding to the longs. For the coming week, I shall raise my stops to 1208. Except the troublesome bearish divergence, all the indicators remain healthy. The MACD continues to rise, the Stochastic maintains above its 80's zone and ADX is still rising. All of which mean the trend is still intact. Since there is the bearish divergence and already within 30 points of reaching its next target, so I would not think of adding more positions.


The weekly chart remains bullish as price maintains above the upper Bollinger Band,the MACD is still positive and continue to rise while the Stochastic remains within the 80's zone. An interesting item here is despite prices continue to rise, the ADX has been flat since mid August. So that it could be another way to call it a bearish divergence.

Another real time learning opportunity here is that the Stochastic has remained "overbought" since late April, but yet price just go higher and higher. This is an valuable lesson here:- if the market has already got into a trending mode, we should not use oscillators like Stochastic, RSI, CCI, W% etc and call the market overbought or oversold. If you thought this market has reached "overbought" when the Stochastic went above 80's and you started to shorted this market, then you would had suffered great losses by now.