FKLI - Play A Short Term Game - 2/20/2012

I took profit on last Thursday when price went below prior day's low. Even though price went back above the top band but the Stochastic is not able to cross back to positive. So I stay out of the market until unless I see price breaks above 1565. If a new long is engaged, use prior day low as stop again as market will get difficult to trade. This is because the ADX has turned flat again which mean its prior smallish trend has ended.



The weekly ADX continues to fall and it has now gone below its 20's signal line. The DMI has also been wiggling for the past few weeks. Both of these are indicating that there is little trend in the market.  You should keep an eye on the Stochastic as it is inside the overbought zone. Do not get too comfortable with the buy side of the game. Be ever ready to take profit and reverse positions.

My game plan remains same as last week - keep a very short term parameter view. Trade on any new signals but be ready to take profit at the slightest provocation. And I am beginning to think :- is  this market in a process of forming the right shoulder of a Head & Shoulder pattern ?