FCPO:- The Bulls Rumble ! - 11/14/2011

The bulls continue to get higher. This market is now well supported by the rising ADX which is complimenting the rising MACD. Though the Stochastic is now within the "overbought" zone, but as long as the ADX is still rising, I would pay more attention to the MACD. The positive DMI is expanding which is confirming the strong trend.

I also take note that the prices have been very volatile with gaps everyday, so I would suggest you to watch the indicators to decide when to take profit rather than my usual method of placing stop at the band. One way will be to allow the Stochastic to cross down its 80's or ADX starts to flatten or place your profit targets at 3200 and 3360.

 

The weekly chart continues to get more bullish as price has now closed solidly above the upper band. I would add on new buy positions when if price goes above 3160.00. The Stochastic has just gone above its 50's signal line. The positive MACD continues to rise. The DMI though remain negative but it has been closing the gap and we may see a positive crossover by the coming week. The ADX has begun to drop which is indicating the bears are on the exit. Since we have a bullish divergence at the Stochastic , I would expect the current cycle to be a strong one.

Just a few weeks ago there were a few brokerage houses releasing their extreme bearish views on this market citing many fundamental reasons such as rainfall, exports and stock holding.  By last week, these people have completely reversing their opinions and begun to rave the new bull. I often find this kind of reversal strange as I wonder how come the "fundamentals" can change within such a short time ? And the best part is that they are always able to offer some "explanations" to back up the new opinions.