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.