FKLI:- More Upside For now -10/31/2011

The shorts position was again taken out on last Monday when prices went back up above the upper band. And I get another new buy signal on Thursday when the Stochastic turned positive again. There is a possibility that the sideway mode may has ended as the ADX has now turned flat and the DMI is expanding instead of its previously wiggling. The Stochastic is in sync with the MACD. Though last Friday;s Japanese Candlestick was not very encouraging, but price is now above its previous high, so we may see the market start to gathering new strength from here. Place stop at 1458 or previous day low minus 2.

 

The weekly chart continues to step over to support the bulls. The Stochastic continues to move higher while the MACD has been turning around, though it remains negative. The ADX stays flat which is saying the bears has gone numb. This is also been confirmed by the contracting DMI even though the D- is still above the D+. Price is now challenging the middle band which is effectively a 20 periods moving average. If price can close above that level by the coming week, it would be another confirmation that the bull is back.

The big question that is begged to be asked now is:- is the bear market over ? If answered from a pure technical analysis point, I would say - No. Unlike DJIA, there  was no major reversal signs on both the FKLI daily and weekly chart. The only "nice" item was a subtle bullish divergence found at the daily chart's Stochastic (19th-23rd September) As for the fundamental side, I think even the FA "experts" would admit there is little bullish about Malaysia's economy that favor a new market bull. In fact, looking at the recent budget , I think we are getting more and more likely to become another Greece. Just look at the amount of money that we are spending to feed the ultra unproductive civil services and building more white elephants. Maybe the rich people has been right by leaving the country.

Meanwhile whatever arrangements done last week at Euroland solve nothing. It is merely just another try to delay what is inevitable. Italy and France should be the next hellholes. I think many local Chinese media have been very happy when they learnt the Euroland boss went over to China begging for some $$$$. It is such a feel good feeling after century of western bullying that now  they have to crawl over to beg China. But will that happen ? Just look at the recent news of China recapitalizing their major banks, rail project complete stoppage  and underground finances crisis, you should get a picture of how weak is China's own finances. We should pray hard that China must hold their own finances together and not to cause another mega crisis on this side of the planet while Euroland's is still unresolved.