FKLI - The Technical Rebound May Fizzle Out - 12/10/2012

The market went back below the bottom band to shake off the weak longs position holders. This is why I mentioned here last week I am placing my stop at the recent lowest low minus 1 point instead of the bottom band or prior day's low minus 1 point. The Stochastic and MACD have continue to rise. The ADX is flat at above the DMI which is telling us that the prior trend has ended temporarily. As I take note that the Bollinger Band has started to tighten, so unless price breaks up above the top band soon,then we may be caught in another one of those listless market mode.

Place stop at the bottom band less 1 point. And when if price start to move further up, then move stops to prior day low minus 1-2 points.



 Last week's Japanese Candlestick was a timely warning, but yet this week's Candlestick is unable to close above the prior week's high and most important of all, it fails to close above the bottom band. So we are not able to get a reversal signal from here. The Stochastic , MACD and DMI remain negative and falling. The ADX continues to rise. All these are telling us that the bears are still in control. If price goes below 1595 by the coming week, then the bears are back in rampage.

Back in the daily chart, the technical rebound may even fizzle out if it is caught in another sideway mode. If this signal fails, then you should pay more attention on the next sell signal. As what happens after a failed market signal is usually quite drastic.