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.