KCPO - Let's Wait For More Signs 14/12/09

My last week's "overbought" observation seems to be a fair opinion as this market started to retrace. It closed below the upper Bollinger Band and took out our stop in the process. I would take the closing below the upper Bollinger Band as an initial sell signal. The Stochastic has also crossed down its 80's signal line which is complimenting my sell decision. The MACD has also crossed down. But as it is still relatively "high" from its zero signal line, I would continue to monitor its descent for a more reliable signal. The ADX has turned flat and since it is now at above both the D+ and D-, I would call that as an end of the prior trend.

Again the weekly chart does not support any selling. Both the Stochastic and the MACD remain positive and rising. Prices manage to stay above the upper Bollinger Band. The ADX is still maintaining its upward movement, all of which are telling us the bull is still in control.

So since the weekly chart does not support the daily bear yet, I would want to wait for more sign before deciding the next cause of action. Meanwhile I would be a little bit cautious. Place your stop at 2550.