FCPO:- Are The Bears Gaining Ground ? - 10/3/2011

 

The market broke down below its recent support but yet did  not actually went anywhere far before recovering some lost ground. But yet I need to see it going back above the lower band to say the bear has gone away. The Stochastic remains negative but seem to be trying to get back up. The MACD is negative and still falling. The ADX has risen to 20's. It is important for prices to hold around this level in order for the bull to stage a comeback. Otherwise, I would fall over to the bear camp soon.

Place stop at 2949 if you had sold . And watch 2955 as a strong resistance.

At the moment, another interesting picture may be in development here. Though prices have again gone to a new low, but the MACD has NOT followed suit. Thus it may be forming another bullish divergence. And this time it is formed nearer to the zero line. Unless prices start to collapse again and erases off this divergence, I remain increasing bullish about this market.

 

The weekly chart is still giving us all the contradicting signals as the Stochastic is still rising while the MACD remains falling. Prices have now gone below the lower band with ADX resuming its ascent. I would afvor the sell side a bit more for now.

Since the daily and weekly charts seems to favor the bear a little over the bull at the moment,I would opined that staying on the side of selling seems to be the more prudent action for now. BUT you should watch out for a possibility that the bulls may lurch back and tear the bears in sheds. Summarily - trade smaller contracts until we see a clearer picture.