FKLI - Najib/Market Remain Undecided ? - 8/13/2012

Last Monday price tested the top band but was not able to close on top of it, anyway I would not want to trade when the ADX  is so 'dead". It remains "dead" at 18's for the remaining 4 trading days. The Stochastic continues to rise while MACD stays negative. Prices seem to be caught within the top and bottom band. this and the contradicting indicators and flat ADX is classic confirmations of a listless market.

Please pay attention to the tightening Bollinger Band as this usually will bring forth explosive move in the near future. Wisdom will be tested to determine which way the explosive move will go. My current thinking would be to see the market drags on for another week and get the Stochastic going into the overbought zone, then I will get ready for the new sell signal in order to reap the next major move. Of course, this is merely my trading plan strategy, whether the market will play out is another matter. A trader should NEVER INSIST that he is "right" but should always react to what the market is dictating.



The weekly chart does not change much from last week's reading. The  Stochastic has already crossed down but it still managed to stay inside the overbought zone. If we see it crosses down its 80's signal line, then it would be flashing an initial sell signal. Meanwhile both the MACD and DMI remains positive. The ADX remains "dead" at 15's for the 4th week, this is telling us that this market is not going anywhere for the time being. The top band will providing a support so until it is breached, we may just continue to see the market drifting sideway.

As usual, the past week see rumors circulating on the latest possible date for the next election. Some are blaming the current market's listlessness on Najib's   indecision. My opinion is to let the politicians worry about the date while we should keep an eagle eye on the tightening  Bollinger Band. I always love that setup.