FKLI - Retracement Halted But Trouble May Be Just Starting- 11/18/2013

The market continues tis retracement and went below the bottom band. The short trade would have got stopped out on last Friday when price went back up above the bottom band. I closed off my trade a bit earlier when I saw the Stochastic went below the oversold zone (oversold in this case as ADX has been low and flat), so I placed my stop at the prior day high in order to maximize the profit.

As mentioned , the Stochastic is now inside the oversold zone. Though price has now closed above the bottom band, but there is no complimentary confirmation from the indicators. So there is no new buy call yet. The MACD stays negative and may be crossing below the zero signal line. If that is to be, then the last rebound which started from late August may be in trouble. The DMI is also negative with the ADX start falling again. With the low ADX reading, there is a possibility that  we may be getting another listless market. So if there is a new buy signal coming out in the coming week, I would suggest you should keep your stop tight.


 

The weekly chart is getting the "danger" signs all over it. The MACD has already turned negative and the Stochastic is already inside the overbought zone. Price is below the top band and may be going below the middle band which is the all important 20 periods moving average. The DMI remains positive but it has been closing the gap between the D+ and D-. The weekly chart may be flashing a new initial sell signal by the coming week. The ADX is still falling and it is now at 18's which means it may be got stuck in another listless market.

The weekly chart favors a new sell signal while daily chart may hinting for another upmove. But both charts are in agreement on a sideway market. So if there is any new trade to be engaged, place tighter stops. France may soon be the next EU crisis main actor coming onto the centre stage, market players may use it as an excuse to sell again.