StockWatch (Mar 02-07, 2009): PSEi, MER

PSEi (Chart: Daily Resistance: 1900 Support: 1818)

Last week was a lazy week for the index. Again, nothing much happened except for the large volume last Monday, but that volume did not translate to any large movement. The index is still moving sideways hovering just below the 65 day MA. It’s getting harder to gauge what will happen next if the index continues its sideways movement this week. We are currently in index limbo now, RSI is neither overbought nor oversold and MACD is also not giving clear picture of where we are heading. Stochastics is the only indicator that I am using that is atleast suggesting that it would either be a sideways to downward movement for this week. The only good sign I am seeing from the chart is that the MACD is consolidating near the center line and the index is maintaining its position near the 65 day MA. But I am optimistic that something will happen soon, this sideways movement will not last long, so better be prepared to react fast.


MER (Chart: Daily Resistance: 92 Support: 7.50)

MER is definitely one stock to avoid for now. It is very clear from the chart that its attempt to move higher is not supported by the volume which is a sign of weakness. If the stock is able to create a higher high by next week, check the following: 1.) MACD and RSI -The creation of a higher high should also translate to a new higher high in MACD and the RSI, if not, then we have a bearish divergence. 2.) Volume- The attempt at a higher high should be accompanied with volume, otherwise, the stock will have a hard time moving upward any further.

StockWatch (Feb 23-27, 2009): PSEi, MBT

PSEi (Chart: Daily Resistance: 1900 Support: 1850)

Again, nothing much happened for the index last week. The index just moved sideways, still hovering near the 65 day MA. Expect further sideways to downward movement next week. Observe the volume. Volume was relatively large last Friday when the index closed lower, which is not a very good indication. If the index would still close lower on Monday with even larger volume, then were in for another round of sell down.

MBT (Chart: Daily Resistance: 23 Support: 20.25)

MBT brokedown from a symmetrical triangle. Sell down last Friday had a very large volume. For now stay away from this stock. RSI and Stochastics are pointing to a correction by next week and possibly a retest of resistance at 23.00. For those who still has this stock, the retest will be a chance for you to sell your position.

StockWatch (Feb 16-20, 2009): PSEi, MER,WEB, AP, BPC

PSEi (Chart : Daily Resistance: 1970/2004 Support: 1866/1818)

Nothing much happened with the index last week. The index moved sideways, and this time, its seems that the 65 day MA is providing support. Volume last week was unusually large, but the action last week doesn’t give much of a clue as to where the index would move next week. In the US, Barack’s stimulus plan just got passed in the congress, and I’m not sure how the local market would react with this news. But based only from the stochastics, the index would probably move sideways or down next week.


MER (Chart: Daily Resistance: 85.50 Support: 71)

MER had a very surprising 2 week rally at a time when most of the stocks are taking a beating. From the chart we could see this rally contributed to the breakout from an upward moving channel. But not all good things lasts, and the formation of a black candle last Friday is probably an indicator that a correction to this 2 week rally is coming. Next week expect the stock to correct and re-test support at 71.

WEB (Chart: Daily Resistance: 0.037 Support: 0.033)

WEB seems to have broken out of a pennant formation. Target price is nearly reached and RSI is very much overbought, so expect a correction by next week. Price is now above the 260 day MA, which is a very welcome sight. However, the RSI and stochastics are pointing to a correction by next week.

AP (Chart :Daily Resistance: 4.75/5.00 Support: 4.10)

AP had a breakout from what seems like an ascending triangle or probably a symmetrical triangle. Target price is at 5.00, but it seems like a correction is about to happen next week with the RSI very much overbought. Watchout if this breakout transforms into a flag or pennant formation. Also watchout for the volume during the correction. If there is little volume on the correction phase, this is a good sign that a lot are still holding on to this stock and that the continuation of the rally may happen after the correction.

BPC (Chart: Daily Resistance: 1.32/1.70 Support: 0.95/1.08)

BPC also had a breakout of a vey small and slim symmetrical triangle. Target price is at 1.32 which very near the breakout level. It is not advisable to get this stock as of the moment, since the target price is very near and RSI is on overbought level. Watchout if the stock is able to maintain its position above 130 day MA. This would be a very good sign of strength if it is able to maintain a position above the 130 day MA.

StockWatch (Feb 09-13, 2009): PSEi, MWC, JGS, BPI

PSEi (Chart: Daily Resistance: 2004/2068/2200 Support: 1818)

The index made an unexpected rally on the last 2 days of trading last week. The index had a white candle with a very small wicker accompanied with large volume. This suggests strength possibly for the short term only. Another remarkable action last week, is that the index is now above the 65 day MA. Judging from the RSI and the stochastics, there is still a little bit room for upward movement before the rally gets capped. Hopefully, the large volume last week could sustain further upward movement this week. The rally was definitely a welcome sight for the index as it prevented the index from forming lower lows.

Watchout for resistance at 2004/2068, these are previous high on the chart, while 2200 is the 130day MA level. It is highly possible that after the rally, there will once again be a short sideward movement before it moves down, which has been the pattern since November 2008. Once the index starts to move sideways again, this would be the best time to cash in on your gains.

There is still no reversal pattern seen in the charts and it looks like the index will continue to move within a range.

MWC(Chart: Daily Resistance: 12.50/12.75 Support: 11.00/9.50)

I was wrong in assuming that this would be a fast trade. As it turned out, it took more than a week before the rally last Jan 23 continued. This got me worried a bit, but the low volume on the days where the stock went down provided some consolation that the selling action is week and that there is still a possibility of a continuation of the rally. From last week’s trade, patience paid off when the stock continued its rally towards 12.50. It seems to be a result of a breakout of a small symmetrical triangle, or if you would consider, a pennant formation with the pole from Jan 23. Both of the pattern’s target price is already reached and it also has touched resistance at 12.50. There may still be room for a little more upward movement as the RSI and stochastics seems to suggest. But I would rather sell for now and observe how the stock would play for the following days. A gap and breakdown with large volume last Jan 16 isn’t easy to ignore. I believe that it would take more than the volume from last week’s rally for the stock to be able to move past the gap, so volume is an important indicator of where the stock would go. If by next week volume doesn’t pick-up, the rally/re-test of previous support-turned-resistance line would fail to move further upward.

JGS (Chart: Daily Resistance: 3.00 Support: 1.58)

JGS seems to be forming a rounding bottom. However, there is not much volume towards the other end of the rounding bottom. Rounding bottoms usually have large volumes on both ends of the pattern. It looks like this will encounter resistance anytime soon as RSI is now in the over bought level. Watchout for this stock as it may form another rounding bottom and possibly result in a double bottom formation. But this would take another 3-4 months before this gets fully realized

BPI (Chart: Daily Resistance: 38 Support: 33.50)

BPI had some promising move last week. Trading last Friday closed the gap that was formed last Jan 29 with volume and also forming a gap-up. This gap up gave way to the formation of an island reversal from the recent downward movement since the start of 2009. However, there is an upcoming resistance at 38, which is the 65 day MA, so volume needs to pickup for next week for it to be able to sucessfully move past the resistance.

Also, there is another promising pattern forming for BPI. Looking at the weekly chart(see inset picture), it seems that the stock has touched support from previous low last Jul 2008, which is a possible double bottom formation. Volume last week was relatively large compared to the successive white candles last Jul 2008 from the weekly chart, which suggests a very good support. Ofcourse it is too early for a break-out, but the opportunity of taking advantage of the formation of the upward leg of the possible double bottom is very enticing, so it is best to exercise caution if you intend to ride the leg. If you got in at 36.50 and volume thins out at 38.00, then it would be best to get out of the stock.

StockWatch (Feb 02-06, 2009): PSEi

PSEi (Chart: Daily Resistance: 1890 Support: 1818/1763/1684)

The rally towards the 65 day MA was short lived and was not accompanied with volume so the attempt at moving past the 65 day MA was just deflected again. This time around a new lower low and a gap was formed, accompanied with relatively large volume compared against other trading days of the week. This looks like further confirmation of the breakdown from the symmetrical triangle last Jan 21.

For the coming week expect further selling action. Next support levels are 1763 and 1684 which are previous lows. A break below 1684 signals the continuation of the downward movement for the index since 2008.