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.