StockWatch (Mar 31 – Apr 4, 2008): PSEi, FGEN, FPH

PSEi (Chart: Daily Resistance: 2970/3000/3200 Support: 2870/2770)

The index had a rally last week, a respite from the continuous selling that has been the general sentiment since February. The index bounced from the low of around 2770 and proceeded to move up until around 2950. As of last Friday’s trading, a long white candle has formed which indicates bullishness. But the question is how long can this bullishness last? Last Friday’s trading for DJIA saw the US index closing lower on further fears of recession. Will the PSEi follow? In my opinion, with last Friday’s trading, there is still a possibility that the rally may extend for this coming week. The index still has room to move a little higher in the very short term before possibly being stopped by a resistance. The index is currently 20 points away from a possible resistance at 2970 which is the short term trend line from Feb 2008 and 50 points away from 3000 which is another short term trend line connecting the troughs of Aug 2007 and Jan 2008. If the index is able to successfully take out the 3000 level, then we may be able to see the index go higher to around 3200-3300. There is still no sign of a reversal, and the downward trend since Feb is still intact so it would still be best to be cautious and stay liquid for now. If the index is able to successfully take out the 3000 level, then probably it would be a buy for the short term hold only.

FPH (Chart: Daily Resistance: 45-50 Support: 39.50/33)

FPH seems to have broken beyond the short term resistance line from Jan 2008. It is interesting to note that the volume on the way up is increasing which gives more credibility to the upward movement. We can probably consider the levels where there is increase in volume as a good support area later on. With the increase in volume on the upward move, there is still a possibility for the price to move higher, probably up to 45-50, level before encountering resistance at 47-50 levels which is the downward trend line from Dec 2008.

FGEN (Chart: Daily Resistance: 45-50 Support: 36.50/29)

FGEN like its parent company FPH also broke out from a short term resistance which is the downward trend line from Dec 2008. Volume is also notably increasing on the upward move. It is also possible that price may move towards 45-50 level before encountering resistance at near 50 which is the downward trend line from October 2008. From the charts there are also 3 successive notable long white candles that formed last week, the 3 advancing soldiers. This is a sign of strength for the stock especially because the pattern is found at the lower end of the price range. How long that strength can last is still not clear as the recent general sentiment of this stock is bearish so the stock will definitely encounter resistance along its way up.


General Note for FPH and FGEN:

Just like other stocks, FPH and FGEN suffered a beating by the bears, so it is not likely that the price will just shoot up to a new high one day. These stocks would still take time to consolidate and will definitely move with in a range. As of the moment, these stock are trading within a downward channel. For those who are willing to take the risk, you can trade that range for these stocks. However one should be cautious and aware that the general sentiment of the market is still bearish and that even if there are signs of strength for these stocks, this does not guarantee immunity from the ill-effects a of general bearish market sentiment.

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StockWatch (Mar 24-28, 2008): PSEi, AC, SMPH

PSEi (Chart: Daily Resistance: 2870/3000/3200 Support: 2620)

“Wow” and “Oh no!” were the first words that I uttered when I saw the index plunge 120 points. I was expecting that trading for last week would be lethargic due to the holiday mood, but it seems that the bears were not taking a vacation and the bulls were the one’s who were out on vacation. The first day of trading last week already broke the support at 2870, that was the “Oh no!” part. The double top area pattern has come to life and the gloomy outlook for our index would be a downward target price of 1950-1820. It is also worth pointing out that the DJIA rallied 400 points up on the expected rates cut by the Fed, but sadly our index did not follow this wild ride up. The fact that the sell down was stronger than the buy up and that our index did not react very much to the DJIA’s rally further confirms the breakdown.

Looking at our index from 2003 and drawing a channel from that time frame up until now, our index is still within that channel and using that channel the next support is at 2620. If that support is also broken, then we can conclude that the bullish move from 2003 has ended.

The last trading day for the DJIA last week had an upward move. I could only speculate that our index would follow, and hopefully have a rally as most of the stocks are still very much oversold. For those who are still stuck, this would be an opportunity to get out of the market for the mean time. For those who plans on playing the rally, just make sure you would be able to react fast once the rally ends. Watch out for support-turned-resistance at 2870 and 3000. Another possible resistance is at 3200 which is the 38.2% fib retracement and 3333 which is the 50% retracement from the downward move since October last year.

Bullish Divergence?

AC and SMPH are showing signs of a bullish divergence in their RSI. AC can possibly go up to 450 while SMPH up to 9.00 just based on their previous highs. However, given the current condition of the index, one would have to be cautious in trading these stocks because even if these are showing bullish divergence, there is no guarantee that it would still be bullish once the selling momentum is started.

AC (Chart: Daily Resistance: 400/465/482 Support: 382/370)

SMPH (Chart: Daily Resistance: 8.50/9.40/10 Support: 7.50/6.50)

StockWatch (Mar 17-19, 2008): PSEi

PSEi (Chart : Daily Resistance: 3000 Support: 2870)

The index went lower than the recent previous low of 2950 and proceeded to its lowest for the week at 2890. Next support is the previous low of August 2007 at 2874. Looks like a double top, but ofcourse this is still not confirmed not until the support line (which is the previous low) is broken. However, a lot of stocks are already very much oversold and badly sold down since January 2008, so there is still the possibility of a bounce from the previous low. Looking at the RSI and MACD, we can also see a possible bullish divergence. Watch out for UP days that are not accompanied with large volume. With the recent continuous downward movement of the index, as well as most of the stocks, a large volume is very much important to validate an upward move. Trading strategy would still be to stay on the sidelines, watch out for a possible bounce from the support or break of resistance line with volume. Trading for this week might be lethargic sideways movement as a lot may be on vacation mode already for the coming long weekend.

The following stocks exhibit very low RSI’s: ALI(20) , FPH(18), PNB(19), VLL(14). Watchout for possible bounce from the recent downward move, but ofcourse the low RSI does not guarantee this bounce as the price may still move lower even if RSI is already the lowest of all stocks. Look for large volume on upward movements.

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StockWatch (Mar 10-14, 2008): PSEi, MBT

PSEi (Chart: Daily Resistance: 3050-3090 Support: 2980/2950)

The resistance line proved to be very strong as the bulls tried to push the index beyond the resistance line for the 4th and 5th time, but was still unsuccessful. Expect that by this week, the index would just move down to sideways and will probably be stopped once again by the resistance line. I’m still hoping for a double bottom scenario at around 2980-2950 level, but its still a wait and see. However, it’s more likely that if support holds, the index will just move sideways for the mean time, until all jitters are over and investors has regained confidence to get back in the market. As of now it would still be best just to stay on the sidelines for the moment and observe.

MBT (Chart: Daily Resistance: 41.50/46 Support: 38/32)

MBT is one good stock to observe and possibly buy if the market does turn around. Currently the stock is moving sideways. Its downward target price of 32 for the H&S formation is still not achieved. Current price at 39.50 is a possible support, if it breaks down; next support is around 38 which is a support line from a small downward channel formed since the middle of Feb. Watch out for possible bullish divergence if incase price still moves lower.

In Retrospect: MEG

MEG

Looks like MEG lost its bullish steam, the stock went to as low as 2.40 on the first trading day and last Friday, it went below 2.40 to as low as 2.36. The trading last Friday opened and closed on the same level indicating indecision for movement of the stock. As of current, since it has gapped down its more likely that this stock will move further downwards for the coming week. Next possible support is at 2.20, which is the resistance-turned-support line

StockWatch (Feb 25-29, 2008): PSEi, MEG

PSEi (Chart: Daily Resistance: 3120-3150 Support: 3060)

The index had a small rally last week only to be stopped by the resistance line extending from the recent high of 3320. As of current, this resistance line was able to hold 3 instances of advance by the index, all have been unsuccessful at going beyond the resistance line. By the coming week we will be able to see if the recent rally of the index still carries the necessary momentum to be able to break resistance or if it would still prove to be a strong resistance.



MEG (Chart: Daily Resistance: 2.70/3.00 Support: 2.42)


MEG went to as low as 2.04 on the first trading day before it was bought up with large volume the following day. The stock also gapped up with a large volume on Thursday and this gap up seemed to have broken out of what looks like a falling wedge or a downward channel. Either way, the target price for the breakout is around 3.00. Upcoming resistance is at 2.70 and 3.00 which are the previous high. Aside from the breakout, the bullish divergence also materialized and as well as the cross over of the MACD above the signal line. We have a couple of bullish signals confirming the breakout and we can expect the price to move higher for the coming days. If you bought at 2.50, cutloss can be at around 2.40 if incase the breakout turns south. MACD is still below zero line, so trading this stock should be for the short term only.

In Retrospect: RLC

RLC

Support at 11.25 stood its ground last week, giving more probability to a possible double bottom. As of current 11.50 is a good support which can be an entry price, cut loss if it goes to 11. If the resistance at 12.25 is broken, there is a possible upside of up to 14 – 15.