FKLI - A Temporary Bottom ? - 5/28/2012

I closed off my shorts position when price went above the lower band on last Thursday. A tell tale sign that the market may has done enough is the ADX has stopped rising. I have gone in and buy the market with price above the lower band which is confirmed by a positive Stochastic. The MACD has already begun to turn around, though it remains negative and the flat ADX may indicate a temporary low is in place. I place stop at 1535 just in case the market continues its prior trend of selling again.

As price had closed above recent resistance on last Friday, so we may expect a new round of up move, short term or otherwise.


The weekly chart Stochastic and MACD remain negative and continue to fall. This is complimented by the rising ADX and a negative DMI. The little bright spot would be price has closed back and above the lower band. I would use the middle band to look as a resistance. IF price can continue to go up and close above that level, then maybe the selling has stopped.

As "bad" and "good" news continue to come out from Euroland on a daily basis, we are seeing a mood swing in the market as intense as a woman going through her menopause. But for those of us trading the market on technical analysis, this does not really worry us. Just make sure you have placed in the stops and you will be alright. But you should remember this:- the Euro crisis is far from over and we shall be seeing new actor taking their turn emerging onto the centre stage and the old ones will keep on springing nasty surprises.