StockWatch (Nov 26-30, 2007): PSEi, GLO

PSEi (Chart: Daily Resistance: 3505 Support: 3455/3290)

The index suffered 3 straight selling days last week with the index breaking the support at 3520 even gapping down to its lowest at 3455. Last Friday the index was up, as well as the DJIA. A couple of things to observe for the coming week: 1.) The broken support from the previous gap up, might be re-tested as a resistance. If the resistance fails to hold, and breaks above it, we need to see the succeeding days trade above that line. 2.) Observe also the gaps formed. As of current there have been 3 uncovered gaps formed. Assuming that the recent gap does not get covered, this also means the resistance was able to hold the line, this translates to further downward move. The only good side of this is that the recent uncovered gap might indicate a possible upcoming bottom to the downward movement. 3.) RSI is now nearly oversold. This re-enforces the possibility of an upcoming bottom. 4.) Assuming that the recent gap was covered, but the resistance line was able to hold the index from trading above and beyond it, we can use the 2nd gap as a measurement of how low the index will move further. Measuring the distance of the 2nd gap from the top, this translates to a further downward move to near 3300 (also the 260 day MA acting as support) as the lowest that the index could possibly go. As of now, the sentiment is still bearish so keep track of your exit points.

GLO (Chart: Daily Resistance: 1450 Support: 1390/1360)

GLO may encounter a temporary breather from the downward movement. As of current, there have been 3 gaps that formed with the exhaustion gap being confirmed by the RSI marking an oversold for this stock. Last Friday the stock was bought up, however, there was not much volume on the buy up, so we might see further downward movement down to 1360. The 360day MA is acting as support at that level. This is a possible candidate for range trading. Buy at 1360, sell at 1450, cutloss at 1355. Note that we are just taking advantage of the possible bounce from support, so trading this stock should be done as quickly as possible. The gaps don’t guarantee a reversal from the current downtrend, unless an island reversal is formed. The gaps just suggest a possible upcoming bottom. But what can also happen is that the stock may rally for a short time from that possible bottom and continue moving downwards, considering that there is still no clear signal of reversal

In Retrospect: MA

MA

The bullishness of MA did not push thru. On the first trading day, it was sold down, and on the succeeding days it went a low as 0.25. This definitely invalidated the breakout as the price went back in and below the triangle formation. The bullishness of the MACD has now transformed into a bearish signal, with the looming action of a cross below center line

StockWatch (Nov 19-23, 2007): MA

MA ( Chart: Daily Resistance: 0.032/ 0.036/0.038 Support: 0.029/0.030)

MA seems to have broken out of either an ascending triangle with 0.30 as resistance or a symmetrical triangle with 0.029 as resistance. Target price of either formation would be above 0.040. Volume on breakout is about 3B shares, volume on the last trading day was 1B. If on Monday the stock was bought up with volume of above 1B, this would be a confirmation of continued bullishness. As of current, MACD is indicating a bullish signal as it is above the signal line and at the same time above the center line.

In Retrospect: LCB, APXB, PEP, JFC

LCB

LCB has proven its bullishness. It was able to move past 0.50 resistance level and continued up to as high as 0.60. MACD also followed as well with the movement of the price. This stock is now over bought and may move down to sideways for the coming week. If we consider the downward channel where it broke out from, the target price is near 0.65. It is possible that a flag/pennant may form for the coming week.

APXB

APXB was not able to move up at par with LCB’s bullishness. Currently the MACD is in the position of forming a bearish divergence, but this is still not final. Any further downward move will definitely seal the bearish divergence. However, looking at the recent trading days, the upward move by this stock has volume, though it may not be as large as the breakout volume, but this is definitely a bullish sign. So I’m more inclined to see the MACD forming a higher high. Considering the downward channel it brokeout from, the target price of the stock is near 8.50.

PEP

PEP went as low as 0.78 and made a large bounce reaching the target price of 1.10 within one day. Watchout for a flag to form. There may still be some play left for this stock considering that there was only 1 day where there was a sell down. But this is left to be proven by next week. If the stock is bought up with volume of around above 10M, there is still momentum for this stock. If the stock is sold down below 0.90 with high volume, then this means the play is over.

JFC

JFC went to as low as 44.50 and went to as high as 50. As of current there is strong resistance at 50. The downward trend for this stock is still intact. Movement for this week may either be up to sideward. There is still resistance at 55. Watch out for the possible formation and break out of an inverted H&S.

StockWatch (Nov 12-16, 2007): PSEi, LCB, APXB, PEP, JFC

PSEi (Chart: Daily Resistance: 3800 Support: 3650/3620/3520)

The index suffered another plunge last Thursday following after the Dow 200 points plunge. As of last Friday Dow took yet another 200 pts plunge after other financial institutions have also started to announce their losses from the Subprime crisis. This recent plunge will definitely be felt this week in our index. As of current we are seeing a bearish divergence forming with the RSI, however, this is still not confirmed as the trough has not yet formed. The symmetrical triangle I have noted before is still intact after the plunge last Thursday and I expect that this will be broken come Monday. Next support levels are 3650 (23.6% Fib retracement), 3620 (previous low) and 3520 (previous low of the gap up last Sept and at the same time, the 38.2% fib retracement). Aside from the above mentioned support levels, another thing to watch out is the MACD crossing below the center line. If this happens, then we may see further downward movement.

LCB(Chart: Daily Resistance: 0.50 Support: 0.42)

LC and LCB surprisingly gapped up with a big upward spread and were accompanied by large volume. This gap up has broken LC/LCB’s long standing downward trend. However, there is something that is not so good on this breakout, for LCB, the wicker of the candle for the breakout day was larger than the body, while for LC, the price opened and closed on the same level. This means there is still strong resistance along the way up. What may probably be good to know is that even if there is strong resistance along the way, there was a large volume on the breakout which may translate to a very strong support level. For LCB, there is still an upcoming resistance at 0.50 which is the previous high from 2005. A thing to watch out though is the MACD, this stock has now formed a higher high, and the MACD needs to follow. If this does not happen, then this is a warning sign for an upcoming bearish action.

APXB (Chart: Daily Resistance: 7 Support: 6.30)

APX/APXB has a similar situation with LC/LCB. The recent breakout from the longstanding resistance line was accompanied with volume. Price formed a higher high and MACD needs to follow. If MACD is not able to form a higher high, then this might be a bearish indicator. For both APX/APXB and LC/LCB, considering the plunge in Dow last Friday, it is highly likely that these stocks would be sold down and if it does, a bearish divergence may form.

PEP (Chart: Daily Resistance: 0.94 /0.98 Support: 0.75/0.72)

This one I think was pointed out in the Absolute Trader’s forum by Yeahbah. PEP brokeout from the inverted head and shoulder formation with a large volume and spread. Target is around 1.10. This is currently doing a return move to re-test the resistance turned support at 0.75. It’s a wait-and-see what will happen by next week considering the recent events in the US market. If price bounces from support, this would be a good time to buy.

JFC (Chart: Daily Resistance: 51 Support: 47)

JFC is a candidate for range trading. Price level at 47 is a support level and may expect a bounce from that level as RSI below 30 is very much oversold right now. Entry at 47, sell at 50, cutloss at 46.50.

In Retrospect: DMC, AJO

DMC

DMC still hasn’t reached the target price of P13. Price was stopped at P12 and opened lower on the first trading day. What I think was positive for this stock was that during the days that it was sold down, volume was low. This might be an indicator that a lot are still bullish with this stock and are still holding on to it. On the last trading day, the stock opened and closed on the same price level, so this means anything can still happen by next week. As of current, resistance is still at P12 and there maybe support at price levels 10.75-11.25. This may consolidate for a while, but considering the position of the 65 day MA and the 130 day MA, this looks like it is poised for a cross over and continue the upward move. The crossover may be used as a buy signal.

AJO

AJO was also stopped from achieving the target price of 0.21. Bullishness is still with the stock because even if there was large volume on the sell down on Wed, there was just as must trades on the day after where the stock was bought up. However, this stock will still further consolidate and the condition may still shift. As of current support is at 0.15. The 65 day MA crossover with 130 day MA can be used as a buy signal.

Absolute Trader's November CAF (Chart Analysis Forum)

Absolute Traders will be having its November CAF on Tuesday Nov 6, 2007 at MetroWalk Ortigas. Visit the AT website for further info.

http://www.absolutetraders.com/

StockWatch (Nov 05-09, 2007): PSEi, DMC, AJO

PSEi (Chart: Daily Resistance: 3800 Support: 3680)

The index gapped down on the first trading day after the Glorietta 2 blast. The previous falling wedge that I was expecting to form was invalidated by the gap down. Currently the index was able to cope with the gap down and has now covered the gap that was made. The gap down that happened seem to have made a symmetrical triangle formation with the index. Index at 3,800 is currently the resistance and support at 3680. Upside target for the symmetrical triangle is at 4100, the downside is at 3380. There is still a high possibility that we may have to redraw the triangle or it may also be invalidated. It's still a wait and see for our index considering that the Dow has recently suffered another 200 points down last week. Plotting the Bollinger Band on the chart, it looks like a move will occur anytime soon as the bands are constricting

DMC( Chart: Daily Resistance: 12 Support 10.75/10.25)

DMC broke out of the ascending triangle during the 2 trading days last week. Target price for the ascending triangle is at P13. At the current price level of 12, it is already very risky to get in. There may be profit taking next week as some may lock in their profits at P12

AJO (Chart: Daily Resistance: 0.15/0.17 Support: 0.13/0.12)

AJO broke out of a symmetrical triangle. Upside target of 0.21. Resistance at 0.15 and 0.17 which are the previous highs. Support at 0.13. Sell when it goes to 0.12. This means weakness in the breakout if it moves to 0.12

In Retrospect: TA, SMCB, GEO, PX, MEG

TA

Target price for TA is reached and has gone beyond up to 2.30 establishing a new high. There is profit taking as of the moment, but price may still move up once profit taking is over. Profit taking may push the price down to 1.80 level, the 38.2% fib retracement.

SMCB

SMCB moved lower and formed a double bottom at 59.50. It invalidated the earlier triangle that I saw. It seems now that 59.50 is a strong support now. Resistance is still at 66 and the bullish divergence is still intact. The double bottom I think is another confirmation that the downward trend is reversing. We have to look at the upcoming resistance at 66, if it is a strong resistance and produces a lower high for the price and a higher high for the MACD and RSI, this is another confirmation of the trend reversal.

GEO

GEO was one of the stocks that was definitely affected by the Glorietta 2 blast creating a gap down on the first trading day after the blast. It has now covered the gap made. This rally would be a good time to sell as there is still no clear bullish indication to contradict the bearish divergence that was seen last week. Price may still move to as high as 2.90 or beyond, however watch for MACD and RSI forming a lower high.

PX

PX formed a higher high for the price, but the RSI and MACD has yet to register a higher high. RSI’s bearish divergence is still intact and now we watch for the MACD if it would follow to exhibit a bearish divergence.

MEG

Bearish divergence on the RSI is still intact. It’s still a wait and see if other indicators will confirm the bearish divergence.