- Expanding Bollinger Band;
- MACD crossing above its signal line as well as going above the zero line; and
- +DMI above the -DMI plus rising ADX.
Chart 1: FBMKLCI's daily chart as at Jan 10, 2017 (Source: Chartnexus)
If you look back to April 2015 when we last had an upside breakout of the downtrend line, we will see the similarity with we have today, which are +DMI above -DMI (briefly) unaccompanied by rising ADX; MACD struggling to cross above the zero line; and relatively small volume. Thus the case for a decent rally in the market - think CNY rally - is not an open-and-shut case as yet. It is still a work-in-progress and as such, we have to be careful. By that I mean you need to sell if your stocks are knocking against resistance and buying small positions even if you see a breakout. As always, good luck in your trades.
Chart 2: FBMKLCI's weekly chart as at Jan 10, 2017 (Source: Chartnexus)