StockWatch (Jul 27-30, 2009): PSEi, SFI, RFM, NI, SMDC

PSEi (Chart: Daily Resistance: 2778 Support: 2626)

The index made a big move last week, it was able to move past 2 important levels of resistance in just a week. The first is the resistance line from Oct 2007, which marks the long term downward trend. Second is the previous high from Jun 2009 at 2626. And furthermore, this was supported by large value turnover, specially last Friday.

The index now has several bullish indicators: The gap up last Friday; The MACD above the center line and above the signal line, and we also have the index moving past the resistance from the downward channel. The moving average is the only indicator that has yet to signal bullishness with the proper sequencing of the 65 day MA(red line), (on top of) 130 day MA (orange line) and (on top of ) 260 day MA (green line). Currently, the 130 day MA has yet to cross above the 260 day MA, but this is in the works right now as we see those 2 lines move closer and closer. A cross-over may happen probably in 2 to 3 weeks time.

The index remains to be overbought, but do watch out as it moves closer and closer to the 80 level of the RSI. I believe that when it reaches that level, a return move towards the previous high at 2626 will happen. This can happen probably towards the latter part of the week or next week.


SFI (Chart: Daily Resistance: 0.245 Support: 0.205)

SFI caught my attention when I was quickly viewing some stocks and what actually caught my attention is the unusual increase in volume for the past 3 days. Looks like something is brewing for this stock, its either that or somebody just went crazy for hotdogs. The price action doesn’t give much clue to what is happening in this stock, but do keep an eye on this stock.



RFM (Chart: Daily Resistance: 0.58 Support: 0.45)

Looks like the main stock being played here is RFM rather than SFI. RFM has more price action compare to SFI and also in my opinion, it is more technically sound than SFI. We can see in the chart that RFM has formed and broken out of a pennant formation. The target price of the pennant has been reached at around 0.57. But, the stock may be in for another pennant or flag formation with resistance at 0.58 and target price at around 0.70. The only problem with the possible pennant or flag formation is that the action can happen quickly and you may not have time to react accordingly.

NI (Chart: Daily Resistance: 11.25/12 Support: 8.60)

NI had a very bullish move last week with the stock moving upwards to a high of 11.25. Based from the chart the recent bullish move was probably due to a breakout of a symmetrical triangle. Target price is at 11.25 has been achieved already, but there is still momentum for this stock and would probably continue up to next week. Another possible formation on the chart is a huge rounding bottom formation with the left part of the rounding bottom at Aug of 2008 at the high of 12.00. One may see also a possible rounding bottom with the left side at Sept 2008, but I think that the low volume does not confirm that it is the proper left side of the rounding bottom. The peak of Aug 2008 is a much better candidate for the left side of the rounding bottom.

For the coming week, watch out for a possible flag or pennant formation and also watchout for 12 which is the previous high of Aug 2008. A break from 12 with large volume would further confirm the rounding bottom formation.

SMDC (Chart: Daily Resistance: 3.75/3.85 Support: 3.45/3.60)

SMDC brokeout from a sideways channel with large volume (see inset picture) . Target price has been reached, however there is a possibility for a pennant or flag formation for this stock. Resistance is at 3.75-3.85, possible target price of around 4.40.

StockWatch (Jul 20-24, 2009): PSEi, LC/LCB, PX

PSEi (Chart: Daily Resistance: 2560 – 2626 Support: 2500)

Looks like this is it, the long awaited break of the resistance line formed from Oct 2007 is just one step away and based on the large value turn over and the gap that formed last week, there is a higher chance that this time, the break above the resistance line will push through.

However, the market is near overbought level again, and the most likely scenario that I could see is that the index would break the resistance and do a return move to 2560 to test the resistance-turned-support level. Also up ahead is another resistance at 2626 which is the previous high. If the market also breaks above the previous high, this definitely means were back on the upward trend for the market.


LCB (Chart: Daily Resistance: 0.29/0.34 Support: 0.225/0.155)

LC and LCB seems to have broken from a sideways channel. One could also say that it has broken from a symmetrical triangle. But any which way you look at it, target price is both at around 0.32.

This stock had a shaky run with the stock being sold down on Wed last week with large volume, possibly by those who were observing the resistance at 0.235. But this was bought back up beyond the resistance, to the high of 0.25 and closing at 0.245 with ¾ of the volume during the sell down. I believe that the large volume on the following day after the sell down, neutralizes the effect of the sell down, which means a lot are still confident with this stock.
This stock is definitely a buy, but do watch out for the upcoming resistance at 0.29 and 0.34 which are previous highs. Also the stock is near overbought so do watch out for a return move towards the support line of 0.235

PX (Chart: Daily Resistance: 7.90 Support: 6)

PX is exhibiting 2 formations, cup and handle formation and also a possible double top formation.

The bullish side of the formation, the cup and handle, has a breakout price at 8.00 with a possible target price of 11.50. A good volume on breakout is around 20M shares traded.

The bearish side, the double top, is still too early to confirm, but if the resistance at 7.90 holds, then do watch out if the stock would break the neckline of the double top at 6.00.

For this stock, it would be best to buy only on break of resistance at 7.90 and watch for the volume, there has to be large volume on breakout preferrably around 20M shares traded

StockWatch (Jul 13-17, 2009): PSEi

PSEi (Chart: Daily Resistance: 2508/2570-2560 Support: 2410/2350)

I wasn’t able to closely follow the local market for the past 2 weeks because my mother-in-law died and I had to set aside blogging about the market for a couple of days. Looks like I missed out some action in the market with the index consistenly moving up last week. The index is now approaching the previous high of 2508 and it is a wait and see if by next week the index is able to move past that previous high. After that resistance, next resistance is between the level of 2560-2570, this is the resistance line formed since Oct of 2007.

The market is consolidating currently and there is still more room in the RSI before it is considered as overbought so there is still a stronger possibility for the index to move further upward. However having those resistance levels near the current index level is a little bit disturbing. For the coming week exercise caution in buying. If trading for this week has low turn over or volume for the stocks, I believe that the index won’t be able to move above the long standing resistance line from Oct 2007 (2560-2570).