FCPO - A Retracement Begins ?- 1/19/2015

 

2 weeks ago I wrote that I was getting cautious about the Stochastic entering into the overbought zone because the ADX was still relatively lowly. Price finally crashed through below the top band which I used as my stop. The Stochastic has turned negative and begin to falling towards its 80's signal line. The MACD has also turned downward and should be turning negative by the coming week. I would sell if price goes below 2298, if done a stop should be placed above the top band. The DMI remains positive with the ADX turned flat. The flat ADX may mean the prior up cycle may has come to an end.


 

At the weekly chart, the indicators are still siding the bull. The Stochastic stays positive and still climbing, so is the MACD. The MACD needs to climb above its zero signal line in order to confirm a new bull cycle for this market. The DMI continues to stay positive with the D- stays below the 20's, this means the sellers continue to stay frightened. The ADX stays flat for the third week, so it is not confirming any new trend yet. The only thing that is not too encouraging for the bull would be that price has broken back below the important support of 2345. I would pay more attention to the top band, if price goes back below that level, it would NOT too good for the young bull.

After a 200+ points rally in a month, it would be healthy for the bull to take a small rest before charging up again. But price needs to stay NOT too far away from here, otherwise the whole bullish mode may be damaged again.