FCPO - It Is A Bull Running Wild In A China Shop - 11/4/2013

  


Price went below the top briefly on last Monday, so if you are using the top band as stop, then it would had closed off the long trade. But I immediately went back in and buy again on the next day's opening when Monday's price already went above the prior day high again. Then the most wonderful thing happened, Tuesday price closed above my earlier mentioned make or break point of 2485. 
 With the ADX now flying high , the trend is getting stronger. So I would suggest to use the top band as the new stop. The MACD and DMI continue to rise and confirming the strong buy power. The Stochastic is clearly inside the overbought zone but I would not pay too much attention to it as the ADX rising to 34's now. The golden rule of trading is that NEVER stand in front of a raging bull or practice brinkmanship with it.  Instead I would place more weight on a MACD crossdown or ADX going above the DMI as an overbought signal.

 
The weekly chart is finally confirming the glorious return of the bull. During the previous week when price went up and tested the 2485 resistance level but failed to break above it, I was a little worried as price may go back down again. But it finally broke above that all important level and swiftly breaking away from there. The Stochastic keeps rising and so is the MACD. The MACD has now gone above its zero signal line which I always used to determine the bull/bear territory. Another wonderful confirmation is coming from the ADX which has been falling for the past few weeks , it has finally begun to rise. Though it is still below the 20's level, but it is a good sign that a new trend may be commencing. Another powerful confirmation for the powerful bull is that the D+ has risen strongly, it has reached 32's level.

 

The monthly chart's MACD is finally having a positive crossover (the so called golden crossover) , but I would NOT place too much emphasis on it yet as it is still below its zero signal line. But it is still a positive development. The Stochastic is turning around and if price can maintain or stay up this month, then we may get a Stochastic crossing up its 20's signal line signal at the end of the month. (please note the latest smallish bar appearing at the chart should NOT take into consideration as it is the current November bar in formation. It will only be completed by the last trading day of this month. All the discussion here is based on the 2nd large white body bar) You should take note that it has already broken above its recent fractal high of 2593. Another bullish confirmation will come if when price can close above the middle band which is the de facto 20 periods moving average. The ADX remains flat but I would not place too much importance to it as it is an extremely 'slow' indicator. If used in a long term chart, its signal is just too lagging. So summarily, the monthly chart is already signaling a reversal from a multi months sideway market to a new bull cycle.

All the 3 time parameters charts are confirming the return of the bull cycle. And with the much discussed multiple bottoms and bullish divergence, I believe whatever the bullish move will be an extremely strong one. And this could be the just the beginning of it all.

Some weeks back a friend called me on the phone and he was jokingly "threatening" me as it seems I was the only one who was insisting there will a super bull coming in the FCPO market while India's Godrej and UK's Fitch taikohs were saying it will fall. My friend was teasing me that I will be soon living in shame. Of course he was merely teasing me, but I have always remain firm on my readings and assumptions that a super bull is coming as it is written all over the chart. But I may not be the only one who took side with the bull, there was a lady analyst from RHB also wrote about the bull's return.