The Exciting LIFE!

A Great Lesson For Me

The KLCI has been rallying up for fourdays in a streak.

On the fifth day, it has a sudden drop of almost 10 points.

However, if you check out the other 3 indicators down there, it doesn't show you any signal of dropping. But there is a hidden killer, its called Shooting Star.

Indicators

1) MACDIts still moving upward and higher, it seems like the upward momentum is still there. Its definitely not a signal to sell.

2) RSIThe RSI is still below 70%, in thise case, the probability is 50 - 50. However, with the fast recovering in that 4 days, I assumed the momentum is still strong enough to push it up a little bit more

3) Stochastic OscillatorAccording to the historical data, All the lines come to as one, and the momentum could still last a few more days before it drops. (I Never expect it drops so fast!)

The Hidden Killer

Shooting Star occured in an uptrend indicates a change a bearish change of momentum.

Bearish Reversal Signal

This means that in the opening of market, the BEAR was dominating and afterwards the BULL push it up again back to around the opening price level. This suggests that the rally is unsustainable and the sellers are likely to take over the market soon. 

Bullish Reversal Signal


So if any of you were to see the Shooting Star in an Upward Trend, you have to becareful. However, the thing goes the opposite way if Shooting star were to appear in a Down Trend. It might indicate a Bullish Reversal.



with your friends who you think they might be interested :)