FKLI:- Remains Bullish But Expect Some Retracement - 9/13/2010

The market seems to be running out of steam last week, most probably due to traders reluctant to take up new positions ahead of the long holiday. Place stop at 1431 to protect profit. If market continues to advance further, I think you should keep the previously day low minus 2 points to protect your profit as the ADX is beginning to get higher than the D+. This is usually a tell tale sign that the market may be getting overbought in a strong trending market.

The MACD has already started turning its head but it remains positive. Meanwhile the Stochastic has already crossed down and falling toward its 80's signal line. In the current strong trending market, I would not bet too heavily on the Stochastic, but I may try some shorts if it crosses down its 80's signal line and prices close below the upper Bollinger Band.

The weekly chart candlestick is a Doji Star which belongs to one of those possible reversal signals. We would need to see the coming week's candlestick to confirm its next course of direction. Though the ADX is still rising, but it is relatively lowly at 17's, so I would keep an eye on the Stochastic which is now considered as overbought. But since the MACD is still rising and D+ is nicely above the D-, I cannot say there is anything solid to say the bull is dead yet.

Summary: there is no strong sign of a bear rearing yet in both the daily and weekly chart, except maybe we can expect some retracement from here.