StockWatch ( Dec 22-24, 2008): PSEi

PSEi ( Chart: Daily Resistance: 1960 Support: 1880)

Nothing happened last week for the index. It just kept moving sideways. With the shortened week due to the holidays, it looks like index will leave 2008 without anything happening. We only have 3 trading days for this week and definitely a lot may be on holiday mode already so volume would probably be low for the 3 trading days.

The symmetrical triangle is still intact, however, the price action is very near the apex of the symmetrical triangle, that if nothing still happened for this week, the symmetrical triangle we are seeing would become invalid.

My hopes are down for any further exciting actions in the market, but if its any consolation, I’d rather see the index go sideways than down.

Merry Christmas and Happy New Year to ALL! Hope you had a very profitable year or if not, a very educationally filled year of trading.


General Note: A lot of other stock’s MACD are near the centerline as well as the RSI’s also near the 50 line. In bearish markets, the center line of the MACD and 50 level of the RSI sometimes acts as a resistance level, so expect either further consolidation or sideways movement or further downward movement. At this point, if there are any upward movements beyond the centerline of the MACD, it has to be accompanied with volume otherwise it will just fail to move further upward and just dip downwards below the centerline.

StockWatch (Dec 15-19, 2008): PSEi, MBT, GLO

PSEi (Chart: Daily Resistance: 1970 Support: 1850)

This is the last normal trading week for the market and it looks like the index is not about to let the year of 2008 go without a farewell break-out or break-down. From the chart, we’ve seen that the index is pretty much following the symmetrical triangle formation and it is currently 1/3 away from the apex, which means the break out or down or dissipation of the symmetrical triangle may happen within this week. Ofcourse this is a symmetrical triangle and it definitely give mixed signals like the trading action last week where rallies were accompanied by good volume, but as well as declines were also accompanied with good volume. So its anyone’s guess where the market will head for this week.

Is the symmetrical triangle a reversal sign? Well sometimes it does act as a reversal pattern. There were cases where a symmetrical triangle can be found at the top or at the bottom of the chart, signaling a reversal. But this we still have to see for the coming week. If this breaks out of resistance, target level is around 2400, hopefully easily moving past the MA’s. If this breaks down, its target level is around 1500.

Still watchout for the MACD and RSI, the index/stock usually encounters resistance on the center line and 50 line respectively during bearish market conditions.

MBT (Chart: Daily Resistance: 23.50 Support: 21)

MBT is also showing signs of a symmetrical triangle similar to the index. Possible upside of up to 31 and possible downside of 13.

GLO (Chart: Daily Resistance: 835 Support 750)

GLO seems to be forming an ascending triangle, but it is still too early for a breakout and anything can still happen. Just watchout for the support line, the formation of a higher low is also good news for this stock.

StockWatch (Dec 08-12, 2008): PSEi, SM

PSEi (Chart :Daily Resistance: 1986 Support: 1830)

Again the resistance line has proven itself to be a strong resistance line. The index was unable to move past the resistance line, and moved lower last week. Volume was very small last week. What is clear right now is that the index in moving within a symmetrical triangle. For the coming week, the support line of the symmetrical triangle will be tested.

Still there is no clear reversal pattern in the chart except for an island reversal on the previous short term upward trend. Watchout for the centerline as MACD approaches it, usually it is an area of resistance.

General Note: A lot of other stocks are similarly forming a symmetrical triangle. It is still too early for a break out or a break down, but do watchout for the progress of the symmetrical triangles.


SM(Chart: Daily Resistance: 183 Support:167)

SM is showing signs of a descending triangle. Trading last Thursday and Friday already breached the support line at 67. Things are not looking good for this stock as the sell down last week was accompanied by significant volume. For the coming week, further breach to the support line may happen.

StockWatch (Dec 01-05, 2008): PSEi, PX

PSEi (Chart: Daily Resistance: 1990-2000 Support: 1760/1830)

The trading last week was very impressive, compared to the situation of the index 2 weeks ago. A new higher low was formed last week and a very impressive rally started on Tuesday which gave the index a 70 point boost in just a day. This was accompanied with a good volume compared with the volume the previous week, but probably not sufficient enough to hold upward momentum. The resistance line is still proving to be a very strong resistance line as it is currently being tested for the third time. It still is any body’s guess on what will happen to the resistance line. Technical indicators are showing us mixed signs. Bullish signs coming from the MACD and stochastics while bearish signs coming from the RSI (50 level is usually a resistance for bearish markets) and the volume on the market action last week (volume is probably not good enough to sustain the rally as evidenced by the last 2 trading days where the index went flat).

It is definitely a welcome sight if the index is able to move above the resistance line. If it is able to move above the resistance line, check for the volume. If the volume is high, then it may probably be a breakout of a double bottom formation ( not your text book double bottom) or a symmetrical triangle. Both formations have a target level of around 2400. Otherwise, if the index moves south, let’s hope that support near 1830-1820 would hold.


PX (Chart: Daily Resistance: 5.70 Support: 4.85/4.40)

PX had an unusually large spread accompanied with large volume on the last trading day last week. It is possibly a breakout from a symmetrical triangle, with a target price of around 6.70. There are however upcoming resistances at 5.70, the previous high; 6.10 the 65 day MA and 6.60 the 130 day MA.

If you are to get in this stock, do take note that the MACD is still on the bearish side, so trading strategy would be only for a short term hold.