KCPO - Selling Re-emerges - 5/7/2012

I went back in selling when price went below the lower band and the Stochastic crossed down again on last Monday. And since ADX was still falling, I was not too sure that this would work out as a profitable trade, so I was keeping my stops tight. But by last Thursday price had broken down the range as marked out the previous week which was confirmed by the ADX which has started to rise by last Friday. The DMI is also expanding its gap. These are telling me that a new trend is emerging now and we may see more intense selling soon.

I take note that the negative MACD has now fallen to its zero signal line and we should it crossing down by the coming week. This is an important sell signal as I always use the zero signal line to determine the bull and bear zone. You can either place stop at prior day high plus 2 points or at the lower band.

 



The weekly chart has now turned more negative biased. The Stochastic has crossed down its 80's signal line which can be taken as an initial sell signal. Another sell signal is the price has also closed below the top band. The remaining positive indicators that still remain on the side of the bull is the positive MACD. But it has also begun to turn down. The DMI is acting the same as the MACD. The ADX has now stopped rising but instead has begun to fall. This confirms the end of the prior up cycle.

As the monthly chart is still supporting the bull, so  this may not be the end of the bigger bull cycle yet. That is unless 3160 support is busted.