FKLI - Longer Term Chart Flashing More Sell Signal - 11/26/2012

Prices were hanging around for the first few trading days of last week, then it went down further on last Friday. If you had applied a stop 2 points above the prior day high, then you would had stopped out on last Thursday. But if you use the lower band as stop, then your short positions would still be intact. It must emphasized here again that there is no fool-proof method for placing stops. So if you were stopped out on Thursday , do not get too annoyed about it. I would wait for another sell signal to get back in.

The Stochastic is in the so called oversold zone, but MACD still show no sign of reversal as it is still falling like a rock. And it is well supported by the rising ADX which is confirming a strong trend. But as the ADX has now reached 33's, I would advocate some cautions here as the selling may be a little overextended. You should tighten your stop from here onward. Placing it at 2 points above prior day high should be a prudent move. If the D- is to fall and crosses below the ADX, then the current selling episode may be over.



 The weekly chart further confirmed last week's sell signal of price closing below the bottom band by reaching a lower low. All the indicators are complimenting the sell side as the Stochastic and MACD stay negative and falling. The DMI is also negative and begins to expand outward. Together with the rising ADX, they are confirming a trend in this market.



As we are approaching the end of the month by the coming week. I would also like to take a look at the monthly chart now and it is beginning to take side with the bears. Both the Stochastic and MACD have already turned negative and price has gone below the top band of 1624. By the last trading day of the month which is on 30th. and if price is unable to close back above the top band, then we most probably has an intial sell signal.

On the daily chart we may see some consolidation before the next shoe drops as the weekly chart is confirming all system goes for a sell. But if price can close back above 1624, then I would have to rethink on the current bearish scenario, otherwise it is time to do some serious selling.