FCPO - It Was A Bull Trap But There Is Still Hope - 5/26/2014

 
 

Yes, it was a bull trap with the previous buy signal. But technical traders are not too worry about them. As long as I maintain a stop , I will close off my trade when things go wrong. In this case, I mentioned that stop should either placed at the previous Friday low of 2573 if your risk appetite is low or at recent lowest low of 2552 if you can stomach a bigger risk.
Anew sell signal was flashed on last Monday when price went solidly below the bottom band with the Stochastic turning negative. I sold on the next day when price went below the signal day low. I took profit when price went above the prior day high of 2525 on last Thursday. This is because the Stochastic has already inside the oversold zone. There is no new buy/sell signal as on last Friday. I am looking forward for a new buy signal as there is a chance that price may break above the bottom band again. The Stochastic looks like it may turn positive again. Of course I would let the market tells me what to do next.
The MACD and DMI stay negative. But I am watching the MACD intensely. If it stops falling and start turning upward from here, it would mean that it is going to form a new bullish divergence again. If this works out the way I wanted it, then the new bullish cycle story may still viable.





The weekly chart stays solidly on the side of the bear. Price has closed below the bottom band which is really a nasty confirmation of a bear cycle. The MACD and Stochastic continue to fall. The Stochastic may be going below its 20's signal line and the MACD is also fast approaching its zero signal line. Both usually mean more bearishness are coming. The DMI has just turned negative, it is the first time since mid October, 2013. If price goes below 2492 in the coming week, then it would flash the last sell signal in the current bear cycle.
A lot of fundamental experts have been getting very excited when someone start talking about the El Nino climate . No doubt the FCPO daily chart may also seem to hinting for some upside action next, but the timing of when investors/traders play will contribute a lot to their heartaches/stresses over their positions. We certainly do not want to see our positions go a few hundreds points against us with buy and hold approach.