StockWatch (Dec 17-21, 2007): PSEi, SMC, MWC, SMPH

PSEi (Chart: Daily Resistance: 3630 Support: 3500/3450)

After a great upward move breaking the resistance line, the index was unable to hold its position above the resistance line and fell below the line. The gains that was made the previous week was wiped out last week. The bearish move by the index was a surprise for me as I was very much expecting that the index would probably move sideways and consolidate further before moving upward considering the bullish signs that is has manifested. Looks like the general expectation that the index will reach 4000 level before the year end will not happen. We only have this week to consider as a normal trading week as the trading action on the last week of the year will probably be lethargic as some may be on holiday mode already. So it will be impossible for the index to rally 500 points in just 1 week. The index may still reach the 3520 level next week before moving either sideways or upward in between 3600-3700

SMC(Chart: Daily Resistance: 60.50/62 Support: 58/55)

SMC and SMCB had a very bullish move last week breaking several resistance lines with large volume. The stock went as high as 60.50 and may still continue to move probably reaching up to 62. However, looking at the 3 consecutive trading days where it made a wild run upwards, it has formed a “Three advancing white soldier” candle stick pattern, with the third candle stick showing signs of weakness as the body of the candle stick is smaller relative to the first and second candle sticks. I believe that the recent upward move is already a sufficient gain for those who have this stock, so it would be best to start cashing in on those gains. The stock is still bullish, so we can just buy back at later time, probably with in the level of 50-55. Don’t forget the ex-div date on Dec 18, if you get too complacent with the recent bullishness of the stock, you just might find yourself loosing some gains come ex-div date.

MWC( Chart: Daily Resistance: 18.50 Support: 17)

MWC is showing signs of divergence of MACD movement against price. Price has formed a higher high, while MACD seems to be having a hard time to establish a higher high. Price as seen on past movement, after a run up, the price action goes on sideways, so expect that price may move sideways with support at 17. Watch out if price moves below 17 with volume. If it does, we may see price to move towards 13.

SMPH (Chart: Daily Resistance: 10.75 Support: 10/9.30)

SMPH broke down from a support line of around 10.50 and with large volume. As of current the area pattern seems to be a head and shoulder or a symmetrical triangle. Either way, its downward target price is around 6.00. However, RSI is currently oversold, so there is a chance that a bounce may happen and hopefully that bounce would have volume that may counter the effects of the breakdown. If that bounce is able to counter the breakdown, then that is a very bullish action and may be considered as a failed head and shoulder. Assuming this becomes a failed head and shoulder, a good volume to support the action would be around 30M shares. Otherwise it’s just a futile attempt by the bulls to re-instate the price above the resistance line.