Yes, that is well within the rules.
You may want to read some of the tuts back on FC to get better results if you feel the quality loss was a bit too much.
http://forums.animesuki.com/showthread.php?t=26533
Your sig is currently 26163 bytes, wich means you still have room to manuever before you reach the allowed 50,000 byte mark.
It is worth mentioning however, that photobucket has the bad habit of increasing the file size of images, so you may consider making your sig around the 47,000 byte mark just to be safe.