KCPO:- Caught In Another Range - 9/20/2010

 

I had taken out my long positions as the Stochastic crossed down which complimented by prices crossed below the upper Bollinger Band. And with that, I have also initialed a new short position. I will place stop at 2641.

The daily chart MACD remains positive and the D+ is still above the D-, so I would be careful with my new shorts. But the ADX has begun to fall indicating the prior bull move has stopped, at least for the moment. It is because the ADX has now gone to at 20's level, so I would also read this market as it is likely to develop into another sideway market. Of course this is also been confirmed by the falling Stochastic and rising MACD.





The weekly chart remains same as last week's. The MACD is going up while the Stochastic continues to fall. The ADX remains flat. Both these patterns are confirming the market is caught in a range bounding situation.

You should pay attention the the triple tops formation and the bearish divergences at the daily chart (the previous double tops) and that at the weekly chart. Most major market  moves usually begin after a consolidation.