StockWatch (Mar 30-Apr 3, 2009): PSEi, EDC, SMC

PSEi-Monthly Chart

PSEi Weekly Chart

PSEi (Chart: Daily Resistance: 2048 Support: 1992)

The index showed strength on the opening of the market last Monday with a gap up accompanied with a large volume. It zoomed past the 65 day MA(red line) and closed just above the 130 day MA (yellow line). The index was also able to move above the logical resistance at 2000, which for the past 3 months has been impenetrable.

The MACD is currently giving us a bullish signal, however, the RSI is displaying overbought signal, so for the coming week, expect to see some selling activities or some sideways movement for the index.

Looking at the weekly and monthly chart, we can see that the bullishness for the past weeks is also reflected in the weekly and monthly chart with the long white candles being registered with good volume. Both charts are also giving us a hint that there may be more to this recent market activity. The charts are displaying comfortable levels of RSI which means there is more room for further growth. MACD for the weekly chart is bullish on the short term, while the MACD in the monthly chart seems to be starting an arch upwards.

The recent market activity is definitely something to hope for, but we still have to be cautious of our trades. There are still lots of resistance on the way up, observe your cutloss levels if incase things turn south. As I have mentioned above, for next week, expect some correction or sideways movement in the market. If you intend to get in the market, observe stocks that would display good support levels.

EDC Monthly Chart

EDC Weekly ChartEDC(Chart: Daily Resistance: 3.90 Support: 3.30)

EDC had a breakout on Wednesday last week. I recently thought that this stock would not do a breakout because of the recent large volume selling on Thursday (Mar 19) and low volume on the white candle on Friday (Mar 20). But on Monday last week, the volume on the buying action matched that of the volume on the Mar 19 selling action which eventually lead to a breakout on Wed. The strength is also evident in the weekly and monthly charts.

I am expecting that the market would slow down next week and coupled with the overbought state of the RSI, be on the look out for a return move towards the support at 3.30. Target price for this stock is near 4.80. The return move towards 3.30 is healthy if there is not much volume on the selling action and support is ketp intact.

SMC( Chart : Daily Resistance: 52/58 Support: 41)

SMC is eerily forming a head and shoulder pattern, however, this type of pattern (not the inverse head and shoulder) would usually occur only on market tops, so I believe that this is not a valid pattern. But, looking closely, there is another patter though that is much more valid in the current market, which is a big double bottom (looks like a big butt). The neckline for the double bottom formation is at 58. MACD is above the center line, so this means we can go long on this stock. If you intend to grab a piece of action in this stock, you would have that chace for the coming week as the stock is expected to correct first before having any further upward movement.

General Note: A lot of stocks are already overbought because of the recent rally. Do watchout for stocks that would display strong support levels for the coming week. Next week might be a good time to get in the market as long as selling does not have volume and support levels remain intact.

StockWatch (Mar 23-27, 2009): PSEi

PSEi (Chart: Daily Resistance: 1920 Support: 1780)

The index last week is one surprising roller coaster ride. The index gapped down on opening of market last Monday and continued to move lower and then on sudden turn of events, the index closed higher last Friday. The rally last Friday was accompanied by large volume so there is a possibility for the effect to continue by next week. Watchout for the 65 day MA (red line). The index has had 3 encounters with the 65 day MA and all have been unsuccessful at moving past that line. It will definitely be a positive sign of strength if the index is able to move far above that line

StockWatch (Mar 16-20, 2009): PSEi, TUNA, EDC, FGEN

PSEi (Chart: Daily Resistance: 1940 Support: 1800)

Just as I was jubilant that market had already reacted positively 2 weeks ago, the market action last week doused my joy and we’re now back below the 65 day MA. We’re still in the long standing sideways movement of the market and for the following week expect that this sideways to downward movement will continue.

Most are waiting for the market capitulation, and in my opinion, the chart is giving us mixed signs on this. As can be seen in the chart, the market has been on a sideways movement since October of last year, and eversince the low of October 2008, the market has not gone back to that low, which suggests that there is very strong support. With that strong support, there is lesser probability of a market capitulation. However, we’ve been on a sideways movement for nearly 5 months and we are not sure up until when the support will last to prevent market capitulation. This long standing sideways movement is probably contributing to a possible market capitulation with players slowly loosing interest with the sideways movement of the market. We are also seeing shorter rallies as observed from the chart, which might also be contributing to a possible market capitualtion. So as you can see, the current market activity is not pointing to a market capitulation, but the current activity is probably contributing to that possibility. But ofcourse who knows? We’ll probably only know we’re in market capitulation if we realize that we ourselves are also part of selling panic.

TUNA (Chart: Daily Resistance: 1.30 Support: 1.26)

TUNA moved more than what I was expecting. I was just expecting for TUNA to just move and stop just above the resistance line, but it went further to a high of 1.40. The amazing thing was that the move towards 1.40 was accompanied with volume. This is definitely a breakout of falling wedge, but I can’t really say if this is the reversal of the long standing downward trend of the stock or a continuation of the recent shorter upward trend from Jul of 2008. Target price for the falling wedge pattern is at 1.70. As of current,there is a possibility that this stock is also forming a pennant formation with a target price of 1.55. If you plan on getting this stock, buy near support at 1.26. Observe the volume on breakout, there has to be a large volume on the pennant pattern breakout. If you buy at 1.30, cutloss when the stock moves below 1.30. Sell for profit near 1.50. Watch out for the moving averages at around 1.45. If the stock shows signs of weakness at that level, like large volumes on sell down, better sell for a small profit for the mean time.

Note: I have made a mistake last week of positng the TUNA chart for the PSEi analysis and the PSEi chart for the TUNA analysis.

EDC (Chart: Daily Resistance: 3.25 Support: 2.50)

EDC is showing a big smile: characteristics of a rounding bottom pattern. However, I’m not seeing a breakout of this pattern anytime soon because the stock is very much overbought. However, this pattern may still transform into a cup and handle pattern in the future, so watchout for this stock.

FGEN (Chart: Daily Resistance: 21.50 Support: 19.50)

FGEN also showing patterns of a rounding bottom and may have already broken-out of this formation. There is good build-up of volume as the stock pushed beyond the resistance line. Looking also at the weekly and monthly charts, both are also displaying a very good picture of the strength for this stock. FGEN is one of the very few stocks that made it near the 260 day MA(green line). Looking at the MACD, this is a candidate stock to hold for the long haul as long as the MACD stays above the center line. However, the stock is already overbought, so expect some further selling to happen. Target price for the rounding bottom pattern is at 28. If you buy at 20, cutloss is at 19.00 if the stock turns sour.

Website: Jonats Gonats: The Divided World of Jonats & Gonats

Here is another good pinoy trader's website by Jonats. JonatsGonats is about the financial struggles of a SAP specailist in the corporate world. This site is about learning things about money and finding inspiration in life. Follow more of his analysis and opinions in his website (http://jonatsgonats.com)

StockWatch (Mar 09-13, 2009): PSEi, TUNA

Note: (Mar 15, 2009)- I made a mistake of posting the TUNA chart for the PSEi analysis and the PSEi chart for the TUNA analysis. I have now corrected this mistake.


PSEi (Chart: Daily Resistance: 1932/2036/2092 Support: 1837)

Looks like the long sideways waiting game is over. The index now got its beat back with a short rally last week accompanied with high volume. Currently the index is just above the 65 day MA, which is a very good sign. The support line connecting the lows of Aug 2007 to Jul 2008 provided a good support while the index was lazily moving sideways. As of current the short term trend is upwards, but there is still no good lead as to where the index would go in the long term. A thing to observe though, the 65 day MA is currently moving near the 130 day MA. If it moves above the 130 day MA, then we have a confirmation that buyers are starting to get in the market again and hopefully jumpstart the life of index.


TUNA (Chart : Daily Resistance: 1.40-150 Support: 1.14)

TUNA has long been moving downwards and it seems that this stock has now reached oversold level. The previous low of 1.14 seems to have provided support last Friday when the stock moved lower, but eventually closed at the same level as the opening price. For the following weeks, watch for a possible rally and retest of resistance line, connecting the troughs from the previous low, this is the support turned resistance line when the stock broke down from this line last Feb.