PSEi (Chart: Daily Resistance: 2630/2685/2700/2780 Support: 2468/2342)
The island reversal that showed up in the PSEi chart delivered on its promise with the index moving higher. The index had a little bit of a wobbly start for last week and ended with a bang. The last 3 trading days we saw successive days with the index closing higher. It is worth noting that the index’s advance broke the 65 day MA resistance with high volume, which is a very good break. The next question is whether the index can sustain this bullishness this coming week. The 3 day advance that happened last week maybe showing us signs that we should be protecting our gains. The 3 white candles are similar to the three advancing soldiers’ formation in the Candlestick charting technique. The formation is most of the time pointing to a warning sign that recent upward movement may start to encounter problems on its further bid for its way up. A visible sign for this is that the third day of advance has a shorter white body and longer wicker than the first 2. It opened higher, tried to move higher in the middle of the trading, but just wasn’t strong enough to hold its position, it receded, was not able to recover and closed just higher than the opening price leaving a longer wicker. Again this is just a warning sign, so suggested action maybe to move your stops higher just incase the market went sour you can immediately trigger a sell or for the risk averse, selling some of your positions might be a better idea. Watch out for the upcoming resistances: 2630, which is the previous support line of the descending triangle; 2685, which is the 130 day MA; and 2700, the resistance line extending from May 2008. The RSI may also be posing a resistance for the index as it is near the 50 level.
Again as pointed before, this is still not the time to go long on your positions, the MACD is still below the zero line but is currently showing good signs of a possible cross above the signal line.
JFC (Chart: Daily Resistance: 57.50/59 Support: 44.50)
JFC, just like a dormant volcano, blew its top off sky high, consecutively moving higher for the 5 trading days last week. The bullish move broke the 260 day MA and also the resistance of the downward channel established since April 2007 all with large volume. Possible target price for this stock is at 57.50. I’m not sure what’s going on financially with this stock, but whatever it is, looks like investor confidence came in by the truckloads. Following the Elliot wave pattern, we may now be in the 3rd wave on a small scale with the first and second wave formed from July to Sept 2008. Looking on a larger scale, we may now also be on the 3rd wave with the first and second wave formed from 2004 to 2008. Looking at other indicators, we have the MACD still above the center line, so this means we can now go long on this stock, especially in the light of the recent breakout. Although for the RSI, the stock might be on the overbought level so this means a possible correction is near. This may give us a chance to jump in on the stock when it moves lower. Watchout for support at 44.50, as long as the stock does not go below this level on its correction phase, we are still safe. As the stock moves higher, the MA’s will further confirm this bullishness with crossovers.
FGEN (Chart: Daily Resistance: 25/27/31 Support: 15.25)
FGEN traded last week with large volume. There is no visible area pattern from which a breakout might have happened. The indication of a large volume makes this stock viable for a short term hold. A good signal to start buying would be if the MACD crossed above the signal line. Watchout for the following resistance: 25, which is the 65 day MA; 27 which is the resistance line formed from April 2008; 31 which is the previous high.
EDC (Chart: Daily Resistance: 4.20/4.50/4.70 Support: 2.95)
EDC had a very good bullish rally last week accompanied with large volume. A gap was formed also with good volume. Watch out for further gaps happening in this stock. This stock is good to hold for the short term only. We have the MACD crossing over the signal line, but still below the center line indicating a short term bullishness. The stock currently stopped short of breaking the resistance at 4.20 which is the resistance line formed from Jan 2008. Also watch out for other resistance levels at 4.50 which is the 65 day MA and 4.70 which is the resistance line formed from October 2007. If resistance line from Oct 2007 is broken, there is a possible of stock reaching target price of 6.50.
SPH (Chart: Daily Resistance: 5.40 Support: 4.40)
SPH closed successively higher for the past 2 weeks, breaking a possible sideways channel formation. Target price for this channel is at 5.40. Current level is at 5.20 and is not a good entry level, especially looking at the RSI which is very much overbought. The MACD on the other hand, is indicating a long term hold, so if you are to get in on this stock for the long term hold, wait for the correction before buying.
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