KCPO:- Let's Wait and See - 9/27/2010

Last Monday opened above the upper Bollinger Band which  immediately took out my stop on my prior short positions. But I did not turn long because the Stochastic failed to compliment the signal until last Friday. So I will place in long position if price breaks 2712. I am not too convinced about its next move as the ADX has gone flat which mean there is a lack of trend in this market.

Another item of interest here is: last week the market took another test at 2733 and again failed to close above that level.  This means it is making another new triple tops formation.  And you should take note the MACD is forming another bearish divergence. Both are usually extremely bearish.

If I am to enter a long trade next week, I would place stop at 2677.



At the weekly chart, you could see very clearly there has been a long term and short term tops which are creating a strong resistance at around 2730's. And the MACD has been forming negative divergences. But at the moment, both the Stochastic and MACD are pointing up and even the ADX has begun to stir up by rising by 1 point. But we really need to see the market close above the 2730 area in order to feel the beginning of a new bull cycle or else we may see a possible collapse in this market.

It may prudent that we should see around and wait for signs of a new direction in this market.