PSEi (Chart: Daily Resistance: 2740/2750/2775 Support: 2632)
Looks like we can again say “this is it!”. We have indications that good things are about to come. The island reversal pattern that is being observed was invalidated as we now have a pullback from the low of 2632. Support at RSI 50 level did hold, which indicates a bullish outlook. Stochastics is pointing to a buy indication. And most importantly, there was a good spread last Friday, a good white candle formed accompanied by with large volume! The only thing that is not pointing to a bullish outlook is the MACD still below the signal line, but on the otherhand, even if it is below the signal line, the whole MACD is still above the centerline which suggests a bullish outlook for the long term. Due to those indications, it is highly probable that we will be seeing a good run for the coming week. Upcoming resistance is within the range of 2740 to 2750, which are points in the resistance line from May to Aug 2008. The same resistance line is acting as the resistance for an Inverse Head and Shoulder formation. A break above that line with large volume is definitely a welcome event. So watch out for the resistance line. Target price for the inverse head and shoulder is around 3300 level. If the inverse head and shoulder is broken, this may be a full confirmation of the reversal of trend. Watch out for stocks that may be displaying the same signs as with the inverse head and shoulder formation.
MBT (Chart: Weekly)
MBT (Chart: Daily Resistance: 41.50 Support: 36.50)
MBT is one of the stocks displaying similar characteristics of an inverse head and shoulder formation. Looking at the daily and weekly charts, the resistance is at 41.50 to 42 with possible target price at 52. What’s good about this stock is that the price is now above the 2 MA’s and only the 260 day MA at 45 is left which is also the same area of resistance from the downward trend line connecting the previous highs of June to Dec 2007. Trading last Friday was accompanied with large volume. Breakout may happen within 1 to 3 weeks.
ALI (Chart: Weekly)
ALI (Chart: Daily Resistance: 11.25 Support: 10)
ALI is also one of those stock exhibiting an inverse head and shoulder formation. Resistance is at 11.25 with a possible TP of around 14.50. Right shoulder is still not fully formed and may also take 1 to 3 weeks to form.
AGI (Chart: Daily Resistance: 5.5 Support: 3.80)
AGI broke out from an inverse head and shoulder formation. It is now halfway to the target price of 5.50. The stock is very bullish with the breakout having a large spread and volume. It also broke the 260 day MA. This stock is definitely a buy, but since the stock is now halfway thru the target price, caution should be exercised when getting in the stock.
PLTL (Chart: Daily Resistance: 8.60/9.90 Support: 8.40)PLTL looks ripe for the picking, last Friday’s trading had a large volume and price at 8.40 and RSI at level 50 are holding on as support. Stochastics and the 3 MA’s are looking good and it is possible that the stock may rise for the coming week. It has a possible target price of around 10.50 to 11.00. Recommendation is buy at current price of 8.50, cutloss at 8.30.
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