FKLI - Trying To Avoid the Inevitable - 3/2/2015

 

After the pre-CNY holiday drifting, the market came back and began to move slightly higher. Price manages to stay above the top band for the past week with indicators turning positive again. But please take note that the Stochastic has already entered above the 80's level which I am reading as an overbought situation. This is because the ADX remains low and flat. So it is again the Stochastic matters more than the MACD. The MACD has turned positive again. It would be interesting to watch whether this will become another new bearish divergence. The DMI stays positive but take note that the D+ has been declining while the D- has also been declining. Both of these are telling me that the buyers are doing it half heartedly  while the sellers have been leaving.

If you have bought in a new position, then use the top band minus 2 points as your stop. I am doubtful this trade can be very profitable.

 

At the weekly chart, the indicators are still climbing. The Stochastic has already crossed above its 50's signal line which is usually interpreted as a more bullish confirmation. The MACD continues to climb toward its zero signal line. I am neutral on this one. The DMI stays negative with the D- continues to fall downward. This means the sellers have been leaving. The D+ has just shown some sign of life by hooking upward. This means the buyers are back into the market to make another attempt to push the price higher. But the ADX has begun to fall again and it is now at 19's, so do not expect much action yet from this market. Price has been testing the top band but has not been able to close above it. If price can close above 1827 by the coming week, then it would be a more promising setup for the bull.

 

At the monthly chart, the indicators are still negative and falling. The Stochastic has alreeady fallen below its 80's signal line. The MACD stays negative but remains above its zero signal line. The DMI stays negative but the D- has been falling, so the sellers are not too convincing. But the D+ is also flat and below 20's, so that means the buyers are also not too bullish. This is also been confirmed by the flat and low ADX which means it is still a listless market. Price managed to recover further after January's closing back above the bottom band which had negated the previous sell signal. Price is now trying to test the middle band. If it can close above 1825, it would bring back some play to the buyers. 

My readings on FKLI various time parameter charts remain utmost bearish - all the "going to hell" setup patterns are still there. Regardless of Bank Negara Boss' cheerleaders play, I am still sticking to my "pay more attention to the sell signals over the buys" thinking and sincerely, I think you should too. The fundamental analysts have been telling you that our nation's reserves is "very big" and therefore 1997 cannot be repeated. But they also forget to tell you that our nation's current problems are also very big, much bigger than those happened during Dr. M's time. Just look at how fast our reserves disappear over the past few months will reaffirm this.