FKLI - A Technical Rebound ? Maybe. 12/22/2014

 
Last week I wrote that I expected some retracement due to extremity reading , the market seems to have hit a temporary bottom and staged a strong rebound by riding on the American markets. Price went back above the bottom band which stopped out my shorts position. The MACD is trying to turn around but remain negative. But as it is still relatively "far" from its zero signal line, I would not bother much even it can get a so called "golden cross" next. The Stochastic stays below the oversold zone, but it seems to be trying to rise above its 20's signal line soon. If it can do that, then with price above the bottom band, it would flash an initial buy signal.  The DMI remains negative with the ADX at 35's and has turned flat. The flatness means the prior trend has stopped, at least temporarily. 


 

There is nothing much to hint for anything remotely bullish except for the Japanese Candlestick which is long legged Doji. It is usually read as a possible bullish reversal type. Of course I would need price to close above last week's high of 1719 in order to get excited. Maybe another item to point at a possible reversal will be the D- which has reached its extremity, it is not uncommon that the market may do a technical rebound from a recent massive sell off. But it is still difficult to talk about the bull as all the indicators are still falling and stayed negative. The MACD is still falling and it is below the zero signal line and the ADX is still rising which mean the trend is intact. Price is still so "far" away from the lower band, so this is confirming the current bearish cycle is still firmly in place.

Summarily, we may expect a small technical rebound but there is absolutely nothing in the charts to tell us that the bear has gone away. In fact I firmly believe we are just at the beginning of a major bear cycle that may last for months , if not years. So if you are still holding equities, properties and Ringgit, make good use of any rebound to get out.