FKLI - Market Overbought Again - 3/31/2014

 


The market continued to show that "we are strong" mentality by going further upward. Price is now above the top band  with MACD and Stochastic positive and rising. Since the ADX continues to stay flat at 12's, so I would watch the Stochastic and start calling it overbought now as the Stochastic has already reached 87's.  I will adjust my stop to either the top band or the prior day low. This depends very much on your personal risk appetite.

 

 The weekly chart seems to be turning around for the bull. The Stochastic is positive and has now crossed above its 50's signal line. Price has also closed above the top band and most important of all, it has also closed above its recent fractal high of 1845. With these 2, this chart is flashing a new buy signal. So by the coming week, if price can go above the signal week's high of 1849.50, it would be a confirmed buy signal. The MACD is negative but it seems to be turning around fast, by the coming week, it may has turned positive, The DMI stays positive but D+ going up to 27's , another sign that the buyers have been strong. The ADX has stopped falling and gone flat, this could be read as a possibility that a new cycle may begin soon.



 
The monthly chart has not flashed any new signal yet except it is still a continuation of the prior trend. The Stochastic has remained positive at above the 80's zone. Since ADX stays flat at 18's, Stochastic should be monitored closely for any changes in direction instead of the MACD. Price managed to stay above the top band, so it is still a buyer market. But the bearish divergence remains intact, so cautious still remains the watchword.

There is nothing too bullish about the market from the charts but it is rather the opposite that we should be looking out for. So at the moment, I just trade on all the short term signals until something big happens.