FKLI:-  Range Bounding For Now But There May Be Something Big Soon -10/11/2010

The daily MACD failed to turn positive even though the Stochastic continues to rise. The ADX has turned flat. For the last 3 trading days, prices had been forming smallish body candlesticks and barely managed to stay above the upper Bollinger Band. All these are telling us that this market is caught in a range bound situation. Place stop at 1478.

The market will need to close solidly above 1487 in order to confirm a new bull move, otherwise you should sit aside and wait for a new confirmation.

One thing of interest here is that you should pay attention to the MACD was supposed to turn upward on 5/6th.October , but it eventually had turned downward again. This is usually taken as an extremely bearish warning. The daily chart MACD has just formed a bearish divergence. With the existing divergence found at the weekly chart, I think a great bear may be lurking somewhere behind the bush and getting ready to jump us. You should be very cautious on this.
 

The weekly chart somehow seems to be more promising. The MACD is still rising, so is the ADX which has now crossed above 20's. Prices maintain above the upper Bollinger Band and the D+ is also above the D-. The Stochastic may be at 92's and usually considered as "overbought", but I would not worry too much about it unless it crosses down below 80's.

As the DJIA has gone a bit overbought as at now, it has retraced more than 62% of its last bear rally and fast approaching its recent high of 11,257. Our market is almost identical to their move, so I am anxiously watching out for a possible top and its consequences.Meanwhile  our Ringgit had gone back above 3.11 which I would take as an initial sell signal. The coming week should bring forth the next sell signals. I am almost sure that it may be going to collapse soon. Its demise may bring down the FKLI too.