DISCLAIMER: THIS IS A PERSONAL WEBLOG, REFLECTING MY PERSONAL VIEWS. ALL INFORMATION PROVIDED HERE ARE TO SHARE ONLY.THE AUTHOR SHOULD NOT BE HELD LIABLE FOR ANY INFORMATION ERRORS, INCOMPLETENESS, OR DELAYS, OR FOR ANY ACTIONS TAKEN IN RELIANCE ON INFORMATION CONTAINED HEREIN.

Monday, May 5, 2014

Divergences Alert!..But there's still room for the current movement..

Well, simply put it, it had been rough sideways trades for both markets last 1-2 weeks. With issues on Ukraine war tensions and also the crops for Soy Beans are expected to increase with dry spell weather, it had made the market eratic and jumpy, trading on a difficult sideways range. Nevertheless, as we all know that after a sideways movement, a trend will follow..but which one? Let us take a look at these markets:


FCPO


FCPO had been in a downtrend since 11 Mar 2014 and started to do a crazy sideways range trading on 9th April 2014. Nevertheless, there might be a possible bullish divergence forming but has to let the price press down further before the full bullish divergence is formed. As we can see from the chart, prices are dropping while the MACD-H may have shallower curve. The red circle indicates that the 2nd downward curve has yet to be formed and hence it is quite likely that the FCPO may head southwards towards stronger supports at 2535-2540 and also 2490-2500. Stochastics had been heading downwards eversince 29th April 2014 and a gap down on 2nd May 2014 had gave the bears the power. Fibonacci 50% level is at 2526-2530 which can also provide a critical support level before it heads for the 61.8% level at 2434. Candlesticks are still below 12,22,32 EMA and no crossings of the EMA lines had taken place which means the selling pressure ought to continue for a fair bit of time more. 


FKLI


As mentioned earlier, Ukraine tensions had made it a priority in markets beating upbeat job data last week in the USA. The historical high at 1877 is still left uncontested and it seems that 1871.5 is the highest it could go. Candlestick pattern today shows an imminent engulfment that erased all gains from the previous 4 days and  Adding to that, there is a clear bearish divergence between price, MACD-H and Stochastics. However, since it did a pretty big drop today, there may be some rebound first in the morning and then later on continue with the trend.

Personal View:

FCPO: The market may resume the bears a little while more before any bullish divergences may show. Hence, there may still be room for shorting but always have your stops in place. Be ready and alert the market starts to rebound. Place urself full of strategies where u can just switch strategy there and then.

FKLI: I would look for positions to short. Hence, short at strength. 

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