FKLI - Reversal But Is It The Real Thing ? -4/13/2015

The recent rally finally fizzled out by last mid week when price began to fall. It has closed below the top band with the Stochastic turning negative. If you are one of those bravehearted type of traders, you may start selling on the coming Monday when if price can go below 1838. But if you belong to those more prudent type of traders, you may want to wait for the Stochastic to cross below its 80's line before taking a new short trade. 

The MACD stays positive but it has begun to turn downward. The DMI, too, stays positive but the D+ has already crossed below the 30's line. This means the buyers have begun to close off their positions. The D- turned upward but not with much gains. Most important of all is that the ADX is still lowly and gone flat. So this means there is still no major trend in force yet.

 

The weekly chart begins to show some weakness as the Japanese Candlestick formed a Shooting Star/Spinning Top which is bearish biased. This is especially so in this case when price has been rallying upward for the past few weeks. This means the bull is losing momentum and may be in trouble. Though the MACD stays positive and continues to rise but the Stochastic has already gone in to the overbought zone. The Stochastic matters more and more important than the MACD because the ADX continues to fall and it is still below the 20's. So I would look out for a new sell signal soon.

As both the daily and weekly chart may flash a new sell signal next, so more attention should rest with them. But fundamentally , the Ringgit and crude oil may rebound strongly soon, so it may help to hold up the market. This is where the lowly ADX effect will continue to play the listless tune.