FKLI:- Expect Some Consolidation or Retracement - 7/11/2011
Last week the market broke another new high but was not able to push further. The week ended with a consolidation as predicted here last week. The Stochastic has turned negative and begin falling. It may go below its 80's signal line in the coming week. So you may want to take/protect profit at previous day low minus 2 points. As the ADX is still rising, you should watch the MACD for signal.
As the Stochastic and MACD are giving contradicting signals, so I expect a sideway market is in making. This will be for a short while until one of them follows the other.
The weekly chart continues to work towards a stronger bull as price stays above its previous resistance. The MACD is pushing upward and the DMI is also continuing its expansion. The most encouraging item here is the sleepy ADX which has finally started to rise. This action may be signalling for a new trend. One item is watch out for will be the Stochastic which has now gone into the overbought zone, so we may see some retracement or consolidation here.
Te fundamental story remains spotlighted on the EU PIIGs, now that Greece has been "saved" (what the "experts" are telling us ) , the crisis seems to has spread over to Italy. And their problem will be many times bigger than that of Greece's. The continuing worry would be:- how long can the Euroland socialists hold things together before the final collapse ? Then another big item to keep the market worried will be the America's debt ceiling showdown in which both their political parties will act out all their wayang kulit (politicians are all alike, just as our recently played out Bersih show)
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