FCPO -  Take Caution On Current Technical Rebound - 9/15/2014

The market continues to rise and now price has closed above the top band which is adding more strength to the buyers. The MACD continues to rise but it is still relatively "far" from its zero signal line, so you should not get too excited on the current retracement. The Stochastic is still rising and it will be entering into the overbought zone soon. So I would be paying a close attention to this. Though the DMI stays negative but the gap is closing up fast. So we may see it turning positive by the coming week. The D+ has just crossed above its 20's signal line, this is a positive sign for the bull. The ADX continues to fall which mean the prior trend has ended.
I am placing stop below last Friday low on coming Monday and I will lift it to below the top band after.


 

At the weekly chart , the current Japanese Candlestick confirmed the previous bullish reversal Candlestick as it closed higher than the last high. Price is getting closer to the bottom band but I need to see it closing above the bottom band to get really excited. The Stochastic has turned positive and it has been rising. But it is still below its 20's signal line. So as like with price, I need to see the Stochastic to cross up above its 20's signal line before begin to think about the return of the bull. The MACD stays negative but it is trying to turn around. The DMI stays negative but the D- is continuing to fall from its recent extremity. This shows the sellers are getting less confidence about their positions. But at the same time the D+ has just risen a bit and that is not encouraging enough for the bull yet. As the ADX continues to rise, so I still have to read the bearish trend is not over yet.
The current technical rebound may be getting overbought soon, so be cautious and get ready to take your profit off the table whenever possible.