FKLI - Bull flex muscle But Is It Real ? - 2/10/2014

 
The market got back after the long holiday and took clue from the Dow Jones. It lost another 16 points but recovered half of it on the next day. At this point, it is either you continue to place the stop at the bottom band or you can take profit when price went above the prior day high. In both case, the stop was hit on the next day when price gapped up and went above both the stop levels.  A new signal came in when price closed above the bottom band with the Stochastic went positive. If you are one of the more adventurous type of trader, you would take this as a signal day. Or if you are of the lesser adventurous type, last Friday provided the more solid buy signal as price continued to go above the middle band with the Stochastic crossing above its 20's signal line and also the MACD has turned positive. So you would buy on the coming Monday if price goes above the signal day high of 1812.

The DMI improves as the D+ is fast rising while the D- is falling. We may see this indicator turning positive by the coming week. The ADX has begun to fall confirming an end to the prior cycle. As the ADX is falling and the MACD is relatively "far" from its zero signal line, so I would continue to pay more attention to the Stochastic for the current trade. If price continues to go further up , I would place my stop initially at below the middle band and then the top band. Otherwise if price begins to go sideway, I would place my stop at the prior day low. Meanwhile watchout for the overhead resistance at 1841 which is the recent fractal high.

 
The weekly chart indicators do not switch sides from the bears as the Stochastic and MACD stay negative and continue to fall. The DMI is fighting back as the D+ pulled back upward which is indicating the buyers are making another effort to fight off the sellers. The ADX has gone flat as this may mean something new may be around the corner. The only big bullish happening here would be the Japanese Candlestick which is a big white body which closed above both the bottom and middle bands in one go. But as far as the weekly chart goes, I do not have any new buy signal yet as the indicators are not complimenting the price bar. One thing to pay attention to would be the recent fractal low of 1775 has been holding.

As far as Malaysia market is concerned, I would not be too surprised if the market "refuses" to die as some people are constantly in a denial mode and refuse to accept that our economy is not as good as they would want themselves to believe. But never mind that, we as a trader, would just read and react to any new signal that comes along.