StockWatch (Jan 26-30, 2009): PSEi, MWC

PSEi (Chart: Daily Resistance: 1910/2000 Support:1830)

Just as things are looking good for the index, a series of unfortunte things happened. First, the index is still unable to move past the 65 day MA, second, a breakdown from the current support line occurred and lastly, this breakdown paved the way for the index to form a lower low. This is the second time that the break from the support line happened. The first is the break of support last Dec 22, 2008, but the index was able to recover the following week which is why I’ve redrawn my support line. From the looks of the index on the last 3 trading days for the past week, there maybe a correction that would happen for the coming week. Volume on the last 2 days were almost the same as the day the support line was broken, and the index was able to stay above the recently formed previous low. The RSI, currently near oversold and the stochastics seem to point to the possibility of a correction or a short rally.

However, the MACD is now below the signal line and below the centerline, a double whammy if I may consider, which is not a good thing to see. If a rally pushes through next week, this would be a good time to exit the market for a while.

Observe the following for the weeks to come: The 65 day MA seems to be a very strong resistance as of the moment. If the index would re-test the 65 day MA without sufficient volume, it may just be deflected again downwards, watchout for the formation a lower low. If the re-test is accompanied with good volume, then I believe it would be safe to get in the market again.


MWC(Chart: Daily Resistance: 12.50 Support:9.30)

For those who are fast on the trigger, MWC is presenting an opportunity to make profit for the short term. After breaking down from the symmetrical triangle, the stock was able to find a new support and correct from the lows. I think the correction is phenomenal as it had almost the same volume as the breakdown volume and a lengthy white candle. This is definitely showing strength, but probably only for the short term. The opportunity being presented here, for those who are fast on the trigger, would be the retest of the support-turned-resistance line at 12.50. You have to be fast on this one as the volume last Friday suggests that the return trip to the resistance line would be fast. If you are unable to get the stock at P10.50 – P11.00, it would be best to just observe. Sell near resistance of 12.50 if you were able to get the stock.

StockWatch (Jan 19-23, 2009): PSEi, MWC, WEB

PSEi (Chart: Daily Resistance: 2000 Support: 1910)

The index closed lower for last week with the 65 day MA preventing the index from moving further upward. Looks like we have to redraw the symmetrical triangle that was seen previously with new support and resistance lines. At this point it is possible that the symmetrical triangle we’ve redrawn may turn into an ascending triangle, either way, both can have a possible target of 2400. The volume (not considering the dates where there were unusually high volume) currently diminishing, coupled with the formation of higher lows, suggests that supply is dwindling and that buyers are willing to buy at a higher price. I am hoping that this action be sustained for the coming weeks to pave the way for a breakout.

For the coming week, there may still be futher selling as suggested by the stochastics. There is still no clear reversal sign.


MWC (Chart: Daily Resistance: 12.25 Support: 10.00/8.00)

Looks like a breakdown of the symmetrical triangle for MWC with very large volume. This is one stock to avoid for now. Downward target price is at 8.00. At this point, the stock is currently oversold, expect a pull back to re-test the support-turned-resistance at 12.25 for the coming week.

WEB (Chart: Daily Resistance: 0.031/0.035/0.037 Support: 0.030)

WEB brokeout of a possible small ascending triangle with large volume and a lengthy white candle. Target price is at 0.038. There are a couple of hindrance to the target price, first is the 65 day MA at 0.031, then the 130 day MA at 0.035 and lastly the 260 day MA at 0.037. Price at current (0.031) is a very ideal price to get in the stock. Cutloss when it dips back to 0.030.

StockWatch (Jan 12-16, 2009): PSEi

PSEi (Chart: Daily Resistance: 1990 Support: 1850)

The market amazingly opened positively for 2009. I was expecting a retest of the previous support line and then a continuation of the short term downward trend. But apparently I was wrong as the chart pulled back from the breakdown and even breaking the resistance line and falling short of breaking above the 65 day MA. Can this be considered a breakout? In my opinion this is not a breakout, judging only from the volume, it was not that large to consider a good breakout and it was not sustained until the end of the trading week. As of current there are still a couple of resistance along the way up, the nearest is the 65 day MA is acting as a resistance level and the previous high of 2070 has not yet been elimated. The MACD just barely crossed above the centerline, which is good. We have to watchout if the MACD is able to hold above the centerline, if it does, then it is a further positive indication of recovery for the index.

There is still no reversal sign and as of last Friday, the DJIA closed lower so expect a reaction from the local market come Monday. I believe that we will still be seeing more volatility as the market consolidates further.
Note: Scanning through all the local stocks, there are lots of stocks that are moving upward having lenghty white candles, but some of those stocks doesn’t have good volume to sustain its upward move. Be cautious of those stocks as the volume is a good indicator that the sharp rise may just be a bull trap.

StockWatch (Jan 05-09, 2009): PSEi

PSEi (Chart : Daily Resistance: 1890 Support: 1760)

The last 3 trading days for the year 2008 painted a not so good picture of what we can expect for the first trading week for 2009. The index broke down from the symmetrical triangle with large volume on the Dec 22. The white candle that formed on the last trading day for 2008 also didn’t help much as it had very low volume. Due to these, it is highly probable that the index may move further downward. Currently since the symmetrical triangle was already broken, we can expect a retest of the previous support line turned resistance at 1890. If the index is unable to move above the resistance line, then it is a further indication of the breakdown from the symmetrical triangle. I’m hoping that the previous lows would be a good support for the index. Otherwise, if the index moves further downward below the previous lows, then we’re in for another very depressing drop in the index.