StockWatch (Nov 10-14, 2008): PSEi, JGS, BPC

PSEi (Chart: Daily Resistance: 2070 Support: 1850/1680)

The index continued its rally Monday last week only to be stopped by the support-turned-resistance line near 2030. Looks like this rally is just a short return move to re-test the resistance line and unfortunately the resistance line held its ground. For the succeeding trading days, the index went down and even creating an island reversal.

Aside from the island reversal, we can see that last Friday’s trading created a short white candle. But unfortunately again, the volume was not that significant. With this, it is highly probable that the index will continue to move further down and may probably close the gap that was created by the rally 2 weeks ago.

Still there is no major sign of a reversal from the current bearish conditions. The MACD, even though it has crossed above the signal line, is still in bearish territory. In a bearish market, the RSI at 50 level is usually a resistance area, which for last week has proven such.
For the coming week watch out for the following: a.) If support at 1850 holds, then this is a very good indication of good things to come as a higher low might be formed if the support holds. b.) Otherwise if the index still moves past 1850, then there is a possibility for a double bottom formation if support at 1680 holds. If this materializes, this might be the reversal sign that we are hoping. c.) If the index still moves past the previous low, then were headed for more selling action.

JGS( Chart: Daily Resistance: 3.15/6.00 Support: 2.55)

JGS just caught my attention due to high volume. I’m not sure what is going on with this stock, but technically it is very much oversold and it hasn’t been able to move significantly with the rally last week. I believe there is still a large potential for a rally in this stock. The MACD is about to cross above the signal line and if it does it may probably spur buy signals for some. Resistance is currently at 6.00, which is the level of the 65 day MA and at the same time, one of the points in the resistance line from Aug of 2007. If you are to get in this stock, recommendation would be to hold only for the short term and sell near 6.00

BPC (Chart: Daily Resistance: 1.70 Support: 0.96)

BPC is showing characteristics of a double bottom formation or a possible descending triangle. Which of the 2 formations will it be is still left to be seen. The double bottom formation has a neckline of 1.70, while the descending triangle formation has support line of 0.96. Just watch this stock for now and wait for either break out or break down.