FKLI - Buy again but remain cautious - 12/10/09

The market staged another come back and took out 1209 stop and started to move upward again. So when it went above the upper Bollinger Band, you would have engaged a new long position. At this moment since the Stochastic is still pointing up and the MACD has started to reverse and turned positive, I would just keep the long position and now place 1222 as my stop.

Again, though this market has turned around, I am still not too bullish and feel comfortable about this market as the MACD is still registering another bearish divergence. I wish to emphasize here whenever we see a bearish divergence formed, it does NOT necessarily mean the market will collapse tomorrow. BUT I would be getting more cautious and keep my stops tight. Now even the ADX has started turning up again which is telling us this bull trend is a strong one, I would keep on the side of the dominating trend which is on the buy side.


The weekly chart is still pretty as price continues to stay above the upper Bollinger Band and the Stochastic stays above its 80's signal line while the MACD may display a slight weakness but it still manages to stay positive.

So the strategy is to stay on the buy side for now and see how further can it go (remembering our next target is just 1250 which is already within striking point) and do not get too carried away by the increasing bullish market delusions. Many of the global commodities and currencies markets may be near a terminal turning point which will affect the equities markets. The Ringgit's recent strength is just one of the forth running example of all these impending changes.

And if this market is to close below 1200, it would mean the beginning of a new cycle.