KCPO - Will The Bulls Able To Fight Back ?- 6/25/2012

The market is trying to stage for another technical rebound. When price went higher than the prior day's high plus 2 points on last Monday, I closed off the sell positions. I bought in new position when price went above the lower band with the Stochastic and MACD turned positive on Tuesday. But this trade turned out to a be a shortlived one as price went below prior day low by Thursday. But I am not doing anything new as there is no sell signal. But since both the indicators remain positive, so I would wait for the next buy signal as when price goes above the middle band or its recent high of 3062.

The market seems to trying to fight back above the 3000 level which may still save the bulls from a major bear market. The ADX continues to fall which is indicating the prior trend may has ended. Please take note the daily chart has already formed a beautiful bullish divergence with the MACD doing a higher trough when prices went a lower low. But since the MACD is still relatively "far" from its zero line, I would  wait for some more convincing signal for this divergence to roar.

 

The weekly chart ADX stays flat for the 2nd week which is indicating the prior selling has stalled. The Stochastic has now gone into the oversold area (oversold because the ADX is below 20's) and price seems to making an attempt to test the lower band. So the coming week would be interesting  to see whether price is able to close back above the lower band. But do not get fooled by the "oversold" status,unless we see the Stochastic crosses up its 20's line and prices going above the lower band , price may just continue to drift lower again.

As  the month is drawing to an end by the coming week . Whether price is able to close back above the all important 3,000 level will be ultimately important to determine whether the bears have over powered the bulls.