StockWatch (Aug 6-10, 2007) : PSEi, URC

PSEi (Chart: Daily Resistance: 3460 Support: 3320/3300)

PSEi was very bearish last week. Even if the US market was up twice by about 100pts each, the index was still down. The index even had false upward move where the market was about 50pts up, only to close lower near the end of the trading hours. The index breached the support line from March and further broke the 130 day SMA near 3400. As of writing, the US market sold down it previous gains going down 200pts last Friday. Expect further selling by Monday for those who would still want to get out of the falling market. Things to expect for next week: 1.) RSI is now very much oversold so this might spur some bargain hunting that would hopefully move the market up. 2.) Price has now retraced more than 50% of the upward move since Feb and it is now approaching the 61.8% retracement near 3300 which may provide support for our market.

URC ( Chart: Daily Resistance: 17.00 Support: 15.50)

URC is very much a candidate for a double bottom. In my previous analysis last May, URC showed signs of a bullish divergence. This bullish divergence was strong enough to break all moving averages but fell short of breaking the long term resistance line near 19. At current, URC is now very much oversold as RSI is way below 30 and somehow this oversold condition of URC may help complete the double bottom picture which may possibly be a sign of reversal from the stocks downward move. And again a further confirmation of a reversal would be if it is able to break the resistance at 18.50-19.00. Considering the volume last Friday, it seems that a lot were able to accumulate this stock at 15.50 to 15.75 which may translate to support area for this stock. If you are able to ride the risk you can buy at this level and hopefully ride this all the way to its resistance at 17.00 or to its complete reversal.


General Analysis
A lot of stocks have now reached oversold level with some even breaking the RSI 30. One of the more significant stock to watch is GEO. Last Friday’s trading had a large volume and RSI is also below 30, just like URC, this may suggest a support at 1.56