FKLI - Bear Maybe Tired But Onslaught Is Far From Over - 1/12/2015

The market collapsed again on last Monday and closed below the middle band with the Stochastic turning negative. I sold again on the next day when price went lower than the signal day low, but that trade fast turning into a loss making one as price swiftly recovered back above the lower band which I used as a stop. As price continued to rally back up, I did not engage any new buy trade as I cannot get a confirmation from the Stochastic which was still falling. The MACD has turned positive for the past 2 days but it will be doubtful to think it can remains so. The DMI stays negative but the D- has been falling and the D+ rising, this means the sellers are leaving again with the buyers taking over their positions. But the ADX has begun to fall again, this could mean that the market is caught in another listless market again.

I will sell again since price has closed below the middle band as at last Friday and the Stochastic is negative and falling. The new sell is only effective if price goes below 1723 on the coming week. The initial stop should be placed at above 1749. 



 

The weekly chart has very little going for the bull as price continues to stay below the bottom band. Both the Stochastic and MACD stay negative and continue to fall. The DMI also remain negative but a word of caution here and that is the D- is at its extremity, so there could be some retracement coming next. The ADX continues to rise, this means the trend is strong and intact.

Though some retacement is possible, the whole bearish setup is far from over and there is absolutely nothing in the charts saying we have reached a bottom. The market most probably will see some range bounding before another new round of selling coming back. Same as the Ringgit , we will continue more downward pressure in months to come. And yes, do not believe in Bank Negara's intervention as an "expert" recently suggested. No central banks have ever won a battle against the market forces. Do not take my words for it, just look at how Russian Central Bank's recent intervention fail to stop their Ruble from collapsing. And Russian Central Bank most probably has much more reserves to go to war than our Bank Negara.