FKLI - It is getting hideous ! 23/11/09

Last week I mentioned that we should dump the long when the market opens. It was not a bad move as the market has been falling continuously for the next 4 days. By Thursday it even triggered a new short when it closed below the upper Bollinger Band. And the daily chart is getting more and more hideous as another bearish divergence has just completed, adding one more to the previously already multiple bearish divergences. The Stochastic has turned negative and next to watch out for is when it crosses down the 80's signal line which may be taken as another sell signal. The MACD has also crossed down and begin falling. But it is still relatively "high" above its zero line , and so is the D+ which is still above the D-. Both of these are making the sell signal not too attractive YET.



The weekly chart finally see the MACD turned negative. But the rest remain positive as prices stay above the upper Bollinger Band, the Stochastic is still above its 80's signal line and the D+ remains above the D-. You should keep an eye on a possible weekly closing of below the upper Bollinger Band at 1255 which can be taken as another initial sell signal.

Meanwhile keep a stop at 1278 for your shorts position.



Despite helps from the newly incoming Maxis, FKLI is getting increasing perilous. The multiple bearish divergences found at its daily chart will have to be resolved soon and by that I would think a fall to 1180, 1110 or 1060 is expected. The longer the government is delaying this correction, the worst it would become when the dam gives way. I would suggest you should keep an eye on the USD, as long as it is going down, the equities market should be able to hold up. But the moment the USD is back on its feet, then equities should see its end of story. And I have been very bullish about the USD for some weeks now.