StockWatch (May 12-16, 2008): PSEi, ASIA

PSEi (Chart: Daily Resistance: 3050 Support: 2710/2670)

The index had a good 2 day rally last week. Volume for the last 2 days of trading was significant and it looks like it may continue for the coming week. The trough for the price and indicators is already visible and we are seeing a positive divergence on the MACD, RSI and Price. It is again good to note that the MACD never went lower and is currently oscillating near the zero line. Also the MACD is about to cross the signal line, so we can probably see more buying action next week. Still no sign of a reversal area pattern, so it’s still generally a downward trending index for now.


ASIA (Chart: Daily Resistance: 10 Support: 7.20/6.00)

ASIA is now out of a downward trend since Feb 2007 as it broke out from the resistance line and also a falling wedge area pattern. The target price for the area pattern breakout is around 16.00. The last 3 days of buying action was accompanied with a very significant volume. The only resistance on its way up is the 260 day MA at 10.00. Also looking at a larger picture, this stock seems to be forming a cup and handle formation. Watchout though for some profit taking action this coming week as RSI is very much overbought. MACD is looking good as it now crossed above the center line. You could probably buy the dips, but watch out if the price heads back to the breakout level at 7.20