PSEi (Chart: Daily Resistance: 2777/3050 Support: 2720/2670)
PSEi (Chart: Weekly)
The index is currently not looking good as the action last week pushed the index below the previous low of 2777 reaching the lowest at 2721. The index is now dangerously near the next support at 2670 which is the support line drawn from 2003 (see Weekly chart). If that support line still does not hold and the index still continues to slide below it, then it may indicate the end of the upward movement that started from 2003. But a couple of good things to note about the index are: A.) The index is now very much oversold, so a rally may happen in the coming weeks. B.) We are starting to see positive divergence in the RSI and MACD in the daily chart. Price formed lower low while the indicators might be forming a higher low. But this is still to be confirmed as the troughs of the indicators are not yet formed.
The index is still very much volatile, so trading strategy would still be to stay on the sidelines. As the index approaches the support line at 2670, watch out for the price action and volume. If the support holds and the index bounces from the support with large volume, then this may provide a good direction for the index for the coming weeks.
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