FCPO - Bigger Dreams Coming ? -3/3/2014

 

Recently when you read about this market , you would notice all the doomsayers have disappeared. In their place it seems everybody is getting high. Suddenly God also seems to come into the picture as the current dry weather also help the market to roar. My usual trading mentality is that whenever these people get too high on the market, I start looking for hints that the market may be topping, at least temporarily. So far my stop at the top band stays intact. The Stochastic has turned negative but it is still above the 80's signal line. As the ADX is high at 35's, so I would not pay too much attention to this yet. The MACD is still climbing. The DMI stays positive BUT there is something that need my attention now. The ADX has now gone above the DMI, to me, this is a strong sign that the market may be getting overbought. OK, having said that, it does not mean the market will collapse tomorrow. It merely mean the market may have came near to a temporary top so I would start to tighten my stop and do not allow all those new bulls to intoxicate the trading plan.
As the top band is getting closer to the recent price actions, so I maintain my stop at the same place.
 
The weekly chart continues it bullish moves. All the 3 indicators are positive and continue to rise. Price stays above the top band. The D+ is still spreading outward which confirm the strong buying. The ADX is still rising which is confirming the current trend stays intact.
 
And now I would like to discuss about what I said here last week about my 'secret higher targets". Taking a look at the monthly chart, we would take note that price has closed above the top band, something it has done for the first time since September , 2010. With a positive Stochastic smashing up above the 50's signal line and a positive MACD, this is a very powerful signal for the bull to go further. Another item that is feeding the bigger bull reading will be the DMI as it has just turned positive, something it had last done on July, 2012. So if I am trading the monthly chart, here is another new buy signal, I would buy if price can go above 2818 by the coming days. After clearing above its last resistance of 2593 and 2754, the next resistance comes in at 3628 which is its last fractal high on April, 2012. There is nothing to stand in its way in between here and there. This is why I have been harboring a sweet dream of an even bigger bull than what I have been publicly advocating last year. Back then as a breakup has not materialize yet, I certainly do not want to plant too many fantasies into others mind. But now, it is getting more and more realistic.
A little bit on the fundamental story and that is the very strange Wilmar story that came out recently. Though there was a denial from the company but I conclude it was a real story as a state minister did went on the media trying to diffuse the 'bomb'. If the notice was non-existant, why the politician came out ? Many EU politicians belong to the powerful "tree hugging hippies" lobby group (they have many local friends here too) , so expect more attacks from them in the future and chapter 2 for the Wilmar story.