FKLI:- The Market May Be Changing For A New Direction Again - 4/4/2011

If you have kept your stop tight as suggested at previous day minus 2 points, then  you would had exited on last Monday. But I had re-entered long position on the next day when price went back above the upper Bollinger Band. Again I am keeping a tight stop at the previous day minus 2 points. Though the ADX has finally stopped falling, but it is still below the 20's. This means the trend is very small. But as the ADX has stopped falling and went flat, this is telling us the former sideway market may has ended and a new trend MAY be developing.

Both the Stochastic and MACD are positive and rising. MACD has gone above its zero signal line which is quite encouraging for the simmering bulls, but since the ADX is still below 20's , so I would pay more attention to the Stochastic which has gone above the "overbought" zone.

 
                            

The weekly chart seems to be turning a corner as the Stochastic has turned positive. The MACD is still negative but is turning around. Price action is the most encouraging as it has closed abpve the upper Bollinger Band - this with a positive Stochastic is a buy signal. The weekly ADX has also stopped falling and turned flat, so I would read this as a signal that the prior listless market may be coming to an end.

Despite the overhanging bearishness in this market, but the big picture of the market seems to has turned a bit muddled. So I would like to wait for another one or two more weeks before deciding any changes in a new thinking is necessary . Meanwhile I would just trade with all the short term signals.