FKLI - Rebound Fizzled Out Fast - 2/2/2015

 

Last week I wrote of the low ADX which require me to pay attention to the Stochastic over the other indicators. The Stochastic went into the overbought zone last week, so I begin to tighten my stop to prior day low minus 1 point. So by last Monday or latest by Wednesday, I closed off my long positions. As at now I am waiting for the next sell signal as the Stochastic has already begun to cross down and it may cross down below its 80's signal line by the coming week.

The MACD remains positive and above its zero signal line. The DMI continues to stay positive but the D- has been falling. This means the buyers are leaving. The D- is now above 20's but it has stopped rising. This would warrant some attention to the selling forces. The ADX has been flat at 20's for the past 3 days, this means there is no trend in the market yet. But overall, I would pay more attention to the sell side of the story over the buy signal.



 

The previous week bullish development at the weekly chart failed to develop further as price was unable to close above the previous week's closing and middle band. The indicators continue to stay bullish as both the Stochastic and MACD stay positive and rising. But as the MACD is still relatively "far" from its zero signal line, so I would not get too excited about it. The slower reacting DMI stays negative with the D- falling. This means the sellers are getting weak. But the D+ is flat which mean the buyers are also not brave. On top of this, the ADX is falling, so I would say there is no trend in this market yet.



 

The monthly chart's MACD is negative and falling, but it is still above the zero signal line. The Stochastic is negative and falling and it is now below its 80's signal line. But we are not getting a confirmation from price as it manages to close back above the previous month's low. In order to secure a confirmation I would need to see price goes below 1693 in the coming month.

The game plan is still to concentrate on the sell side over the buy side. A correction in the US Dollar and crude oil may bring back some bullish sentiments, but get fooled by it as to think we are out of fire pit.