FKLI - Time To Sell ? - 4/28/2014

My stop at 1856.50 was hit which closed off my shorts position. I am not too surprised as the market is now in a listless mode and some false breaks should be expected. Price went back above the top band and with the Stochastic turning positive again have triggered a new buy signal. It is because of the low ADX, traders may be excused if they decided to sit out on this new signal or they can still loyally obey and bought in again. Of course this turned out to be another one of those "unfortunate" trade signal and the position was swiftly taken out when price fall below the top band.

And as on last Friday, price has again fallen below below the top band with the MACD turning negative. This has flashed another new sell signal. The Stochastic stays positive and so is the DMI. Due to the dominating bearish divergence at the weekly chart which I mentioned many times here, I would pay more attention to any new sell signal over the buys. Here is also a very interesting development at the daily chart, with the recent high at 1870 done on last Wednesday, I notice that both the MACD and Stochastic failed to register a higher peak. In another word, we finally get a bearish divergence at the daily chart and this is been backed up by the bigger weekly divergence formed earlier. There is also another interesting item and that is the D-. It has spiked up to 23's which is telling me the sellers are getting more committed to trying to push the market down.  So I will sell on the coming Monday when price can go below the signal day low of 1852.

Of course with the ADX falling anew and it has now reached 12's, I am not sure this is not going to be another one of those "unfortunate" trades, but I think the bears seem to be gathering more strength recently. If the new trade is done, I would place a stop at the recent high of 1870. 


 
The weekly chart's indicators  continues to be positive and rising. The ADX stays flat at 16's for the 6th week. Price is still contained within a box going nowhere. The latest Japanese Candlestick is a Doji Star where price gaps above the previous candlestick. This usually signal a possible reversal. But of course we need to see the next Candlestick for a confirmation.

Again I want to express my bias towards the bear over the bull, I have been looking out for a sell signal rather than a buy.