FKLI:- Stay Long But Watch Those Stops -8/23/2010

I bought again when price went above the upper Bollinger Band supported by a positive Shochastic on last Monday. By Friday prices managed to stay above the upper band with both the Stochastic and MACD staying positive. I would place stop at 1376.

The ADX has started to rise confirming there is the presence of a trend in this market. I would only consider doing new shorts if when the Stochastic crosses down its 80's signal line.



The weekly chart's Stochastic and MACD remain positive and rising. An item of concern here is the toppish Stochastic . I am still paying more attention to it as the ADX remains low. Weekly price is a big white candlestick which comes after previous 3 weeks of indecisive Dojis and Spinning Top. So this is a confirmation that the bull has won this battle for the time being.

An interesting development is that the prior bearish divergence found at the daily chart may be erased off by last week's advances, but the weekly chart's bearish divergence remains intact even though prices break new high. So with the lowly ADX and an overbought Stochastic, I remain cautious about this market.

The Euroland currencies charts seem to be foretelling the part 2 of the PIIGs crisis .  Meanwhile at the Middle East, Russia fueling up Iranian nuclear reactor may force an American and Israel's military reaction. Either of these 2 news were to break in the media would be bad for the stock markets all over the world.