FKLI - " We Are Strong" -3/24/2014

Whenever the ADX is below the 20's and especially when it is last at 14's , I just do not want to get too "hot" over a sudden move. As in the case of FKLI now, the ADX has been flat at 14's for the past few sessions, the market did not follow through with the previous week's down move direction. Instead it staged a big come back day on last Monday with a 19.5 points bounce and closed above the bottom band which hit my stop and closed off my prior shorts position. On the next day when price stayed above the bottom band and the Stochastic came in and turned positive, this is flashing an initial buy signal. I bought in on last Wednesday when price went above the signal day high. But this position was immediately demolished on the next day when price went below the signal day low. But I re-engage another new buy on last Friday when price went above Thursday high since it closed back above the bottom band again.

This is one of those "unpleasant " things that would happen to any of us during our trading career. But what I want to emphasize here is that we must adhere to our trading rules by all means. We cannot have the "lets hold another 1-2 days and see what happens next" type of mentality. As that "1-2 days" may break your trading account and invite margins calls.

As at now, I am placing my stop at below the bottom band. And if price can continue to rise further, I will raise the stop to the next band.

The Stochastic stays positive and rises. The MACD is still negative but seeming to be turning around fast. It may be turned positive by the coming week. The DMI is still negative and the ADX continues to stay flat at 14's. So with the low ADX, I would call the current market another smallish cycle so I would use the Stochastic to trade. Once it gets into the 80's zone, get ready to take profit.


 
The weekly chart is still contradicting as the previous week's. The Stochastic is positive and rising but the MACD stays negative. DMI is positive but deteriorating. The worst of all is the falling ADX which is now at 16's. This is telliing us there is no trend in the market. Price did went below the previous week's low but failed to close below. Instead price fought back and has now closed above the middle band again. There is no new buy signal here yet. I would want to see price close above its recent fractal high of 1845 before mentioning the bull.

I remain more bearish biased, the current buy signal in the daily chart is merely a smallish trading signal. I cannot find anything major bullish in these charts to get excited on. Last week some foreign fund thought Malaysia is the weakest 2 merging markets what would get hit hard next, very swiftly some local "experts" rose and wrote that we are strong and the future is very rosy. A standard "Malaysia Boleh" reaction from our local "experts".