StockWatch (June 30-Jul 4, 2008): PSEi

PSEi (Chart: Daily Resistance:2543/2650/ Support: 2458/2430/2300)

The index plunged further down on the first trading day of last week. The index went to as low as 2458 last week, breaking the previous low support at 2510. But although the previous low was broken, the support line extending from Jan 2008 has yet to be broken by the index. This is now the fourth instance where the Jan 2008 support line was tested, and with that, we can say that this is a very strong support line. However, last Friday’s trading further tested the support line for the 5th time. I’d like to assume that it would be able to contain the downward movement as it was able to prevent the index from moving further downward for 4 times already. But Friday’s gap down, accompanied by a large volume on the chart, made me think twice as to whether the support line will still be able to hold the index. The support line has a good track record, but the gap down with volume is hard to dismiss, so it’s really anyone’s guess if the support line will hold come Monday