KCPO - Bulls Fighting For A Comeback ?- 3/11/2013

 

The bears did not follow up with their attacks but instead just fizzled out last week. Prices drifted sideway and eventually hit my stop at the bottom band plus 2 points on last Thursday.  A new buy signal was triggered on that same day when the Stochastic also turned positive. Since the Stochastic was still under the 20's level, I applied another filter to buy when if price was able to go higher than the signal day. high which it did on Friday. When the Stochastic crosses up its 20's signal line, it would offer another buy signal. The MACD stays negative but seem to be trying to turn up.

The ADX has now fallen below the 20's signal line which may be telling us the market may be go drifting again. So I would not want to keep my stop too close at the bottom band initially. I am placing stop at the recent low of 2367 minus 2 points. When if price is able to go above the middle band, then I would lift my stop to the bottom or middle band minus 2/3 points. This is to prevent getting my positions whipped out which is very common during a lowly ADX mode.


 

The weekly chart's Stochastic and MACD remain positive and rising. Price managed to close back above the middle band but it is below the prior week's high. So as for the Japanese Candlestick trading method, there is no buy signal here. I would look forward for a close above the top band for a more solid confirmation for a new bull cycle. The ADX stays flat at above the DMI, so it is still the same story that the priro trend has ended. The most interesting item here is that the Bollinger Band has continued to tighten. This is forewarning us that an explosive move is ahead.

If price is able to go back above 2593, then I will reverting to my earlier extreme bullish thinking (multi bottoms and divergence at indicator) Meanwhile just apply the oscillator indicator and trade the market accordingly.