FCPO - Buy Signal Did Not Come , So Go Sell Again - 7/29/2013

The market failed to hit 2302 again last week, so my plan for buying did not materialize. But instead I went back to sell when price broke below the previous day low on 24/7. This is another real time lesson to be learnt here:- though the Stochastic was near its 20's level when most market commentators would start calling it an oversold situation, but that "oversold situation" certainly did not stop the market losing another 70+ points. Currently all the 3 indicators are taking side with the bears. The Stochastic though below 20's level, it is still falling. The MACD continues its descent and it is below its zero signal line level. The ADX is still rising and it has reached the 35's level. This means the trend is still going strong. I would either place my stop at above the bottom band or I can also protect a bigger chunk of the profit by placing stop at the previous day's high plus 2/3 points. I would suggest the 2nd method as the Stochastic's low reading may encourage some sellers to take profit and causes the price to flung upside a bit. The former strong support of 2230 now has become its strong resistance. Unless we can see a swift breakup above that level, I would think the bears will remain in control for the time being.

 

The weekly chart continues to add strength to the bears. Both the Stochastic and MACD are falling. The D- of the DMI is expanding upward, this is telling us that the sellers are getting stronger and flexing their muscles. Price stays below the bottom band and also the long term support of 2230. The ADX has finally kicked in its support  and rise. This is confirming a new trend has started in this market.

Both the daily and weekly chart now complimenting each other and support the bears.