FKLI:- The Bull Is Getting Stale - 1/3/2011

The market broke out of the smaller range but failed to stay above the recent high of 1530.50. The Stochastic is down while the MACD is up, a contradiction that is typical of a range bounding market. This is also confirmed by the flat ADX at below 20's. As I mentioned last week:- it is alright for you to stand aside of this market for the time being.



The weekly candlestick comes with a long upper shadow which is usually considered as a bearish signal. This is especially so when it occurs at its recent high which is now its resistance. The 2 indicators are just like those in the daily chart but reverses their role - Stochastic is up while the MACD is down. The bull is gaining more supports than last week as now the Stochastic has turned positive, price is above the upper Bollinger Band and D+ is above the D-. But with the ADX staying flat, I do not expect the market make any major move yet.

With another bearish divergence  formed at both the daily and weekly chart, I am getting increasing cautious. Though it may not necessarily mean this market will collapse soon but this is telling me the bull has really grown stale.