KCPO - Bears In Control But Are The Bulls Planning For An Ambush ? - 8/13/2012

I got another sell signal on last Monday when price went below the bottom band with a confirmation from the Stochastic. Since the signal is occurring near the oversold zone, I am keeping a tight stop by using the prior day high plus 2 method. This trade has been so far so good, my latest stop is at 2887. Base on last Friday soyaoil's closing, I think this stop should be taken out by the coming Monday opening.

The Stochastic is already hooking up but remain negative and below the oversold zone. Both the DMI and MACD are still negative. The ADX has already rising so we need to be careful as the next Stochastic crossing buy signal will merely be a flash in the pan type.



The weekly Stochastic has turned down and go negative again. The ADX has finally begun to rise which is signalling a new trend may be forming. But price managed to bounce back up from its last low of 2838. If price is able to crash below this support level, then we may see more selling pouring in. But  on the other hand if this level can hold, then we may be seeing a double bottoms in formation. If that is to come in fruition, then we also are getting a bullish divergence at the Stochastic.

Though the long term monthly chart is turning bearish, but the short term daily chart and the intermediate term weekly chart seem to be hinting for a possible reversal. I also take note of the sudden bearishness views and comments from the fundamentalists which seem to coming on the printed media recently (they are worried over the increased stock holding and low prices. Some of them advise palm oil stocks should be disposed off) . I usually take their extreme views as  a contraian signal for groundwork preparation a possible reversal .