PSEi (Chart: Weekly )
PSEi (Chart: Daily Resistance: 2730/2755 Support: 2630/2575)
The index isn’t looking good after a week’s sell down. The worst that we are expecting had already occurred with the index breaking the standing support line from July of this year. To further aggravate the situation, the support line was broken with large volume. The break of the support line from July can also be regarded as a break down from the upward channel, with a possible downward target price at 2530. Next possible support is at 2630, which is the previous low. Support at 2630 is acting as the support line for a descending triangle. If this descending triangle is broken, the possible target price is at 2470. The next support after 2630 is at 2575 which is the 65day MA. As you can see, it’s a double whammy waiting to happen for the index. The weekly chart also confirms this impending further bearish action. As it is seen in the weekly chart, the price action for last week is short of a bearish engulfing pattern with a large black candle forming with a very large volume. The other indicators are also not looking good, with stochastics still opening downward, as well as the MACD moving below the signal line. For the risk averse it would be best to avoid the market until a possible support is formed. The long term outlook is still not as grim as the short term, but it is dangerously moving towards a bearish outlook, with the MACD moving near the center line.
CHIB (Chart: Weekly)
CHIB (Chart: Daily Resistance: 560/565/575 Support: 545)
CHIB seems to have gone against the prevailing market trend with a surge in volume for the last 3 trading days last week. I’m not sure whether this surge in volume is just due to some cross trades and there is also no area pattern from which it might have broken out from. The only possible pattern that I can see from the chart is a small double rounding bottom with the neck line at 575. But even if there is no area pattern, this stock is worth following as other good things are showing up in the indicators for this stock. The MACD alone is above the signal line both for the weekly and daily charts, which suggests a bullish outlook. The only problem the both MACDs is that it is still below the center line. But for the daily chart, it is near the center line and is in position to cross above it. Watch out for resistance at 565 which is near the 65 day MA and resistance line formed from Oct 2007. If this resistance line is broken, this means this stock is now out of the bearish dive. Next resistance is at 575, which is the previous high and the neckline of a possible double rounding bottom. If this neck line is broken, the possible TP is at 605. Price below 560 is a good entry point for this stock assuming a possible target price of 605. Watch out also for the other MA’s acting as resistance along its way up.
SMC (Chart: Daily Resistance: 52/53.50 Support: 50/48)
SMC successfully broke the resistance of the inverse head and shoulder confirming a reversal form the previous downward trend. Target price for the pattern is at 57. The breakout also moved past the 260 day MA. Looking closely at the trading for the last 3 days, there seems to be another area patter, a flag pattern, forming, with the target price nearly the same as the inverse head and shoulder target price. A word of caution though, the price of the stock is nearly halfway its target price, so if you are investing for the short term, there might not be enough good profit to receive from this stock. For the coming week, there is a possibility that a sell down may further happen. For those planning to enter, a good entry point would be from 48-50 as long as it does not go below 48.
No comments:
Post a Comment