StockWatch (Oct 26-30, 2009): PSEi, BPI, SM

PSEi (Chart: Daily Resistance: Resistance: 3000/3092-3149 Support: 2915/2884)

The index bounced back from 2 consecutive days of selling. RSI did bounce from the 50 level, which means.the market is still generally bullish. Expect the continuation of the upward move next week, but do watch out for upcoming logical resistance at 3000, which I think by next week would be broken, and the standing resistance line from March at the range of 3092 to 3149. The standing resistance from March 2009 is still blocking the index’s upward progress, but I believe that this will be eventually broken by Nov and will become support by then.

BPI (Chart: Daily Resistance: 48.50 Support: 45.50)

BPI actually had a breakout at 47.50 from an ascending triangle forming from May 2009. The breakout was supported by large volume, the only problem was that it could not get past the standing resistance at 48.50. The day after the breakout, the stock went higher, but closed on the same level as the opening for that day, which indicates that there is still a lot of bearish sentiment for this stock. Then eventually the stock made a return move and price fell below the breakout line. This further confirms the weakness of the stock. Trading last Friday moved the stock above the resistance line again, but this time there was smaller volume, which indicates the upward movement is not that strong.

BPI actually has a large upward potential, you can either consider a large inverse head-and-shoulder formation or an ascending triangle formation, either way it give a great upward potential. The only problem is with the recent activity that I have explained above, it seems that it is not yet time for this stock to soar. But do watch out for this stock, especially if it breaks above the resistance line of 48.50. I believe that this could happen probably within Nov to Dec time frame.

SM (Chart: Daily Resistance:325 Support:290)

SM seems to have formed an island reversal. The stock had a sell down on Tuesday with large volume, followed by a large downward spread the next day with relatively lower volume. By Thursday, the stock gapped down and went into an indecision mode, with the stock opening and closing on the same level. This was accompanied with a very large volume. Considering the previous 2 selling days of trading, the indecision was rather a welcome sight to have. Although this may indicate indecision, this also indicates support. On the following day, Friday, the stock again gapped up with relatively large volume, which further confirms the support the previous day.

Looking at the RSI, the stock is currently oversold, and there is still a large area for upward movement. However, the MACD, suggests that this stock is bearish as it is opening downwards and below the centerline as well. So trading strategy for this stock is just to take advantage of the low RSI level and get out at the first sign of weakness. Watch out when RSI reaches near 50 level, usually when the RSI is coming from the low of RSI 30, RSI 50 is regarded as an area of resistance or rather an indicator that stock is overbought.

StockWatch (Oct 19-23, 2009): PSEi

PSEi (Chart: Daily Resistance: 3000/3100 Support: 2915/2884)

The index is still moving sideways and indicates a lot of indecision. Resistance at 3000 still holds and the resistance line from March 2009 still hasn’t been broken yet. For this week, still expect a sideways to downward movement for the index.

Looking at the RSI, if the current side to downward movement of the index continues, the centerline at 50 RSI may provide support and bounce the index back up. This may happen towards the end of this week or by next week. If it does bounce back from the RSI of 50, this is probably an indication that the market generally is still bullish because the index hasn’t moved far below the RSI 50 since Aug. This means there is a significant amount of bullish traders out there that is buoying the index above RSI 50.

November is fast approaching and generally buying becomes active from that month onwards, so there may be some hope that we may be able to move above the resistance line from March 2009.


General Note:

There are a couple of third liners whose prices shot up last Friday accompanied with volume. These are MHC, MRC, ION, TBGI, UW, BHI. The upward movement may continue next week, but be cautious because some of these are already overbought and these stocks are usually unpredictable, its up one day with large volume and then down the next day, so watch out for previous highs and RSI of 70. MHC, TBGI, UW and BHI have RSI’s in between level 50 and 70, so there may still be room for some more upward movement.

StockWatch (Oct 12-16, 2009): PSEi

PSEi (Chart: Daily Resistance: 3000 Support: 2884)

The index moved higher last week, creating 2 gaps accompanied by large value turnover on the first gap, but lacked follow-through in its bid to go past the resistance line (previously support line) from March 2009.

Although the move was accompanied by large value turn over, I am not that convinced of the upward move. In my opinion, this may be just a bounce from the RSI centerline of 50. Succeeding days after the gap up did not have large spread and value turnover as the first 2 gaps, which in my opinion is an indication that many are still in doubt also of the recent bullish move. If there had been no doubt or hesitation in the market, the standing resistance line from March 2009 could have been easily breached with the large turn-over.

For now, the MACD is saying it is bullish, but I would still advise caution in buying. In my opinion, I’d still stay on the sidelines for now and still wait for the standing resistance line from March 2009 to be broken before getting in the market.

StockWatch (Oct 05-09, 2009) :PSEi

PSEi (Chart: Daily Resistance: 2905/2960 Support: 2767/2721)

The recent flooding did affect the start of the trading week, but not as much as I expected as there was low value turnover on the downward movement of the index.

The index is still moving sideways within the range of 2767 and 2905. It has been moving sideways for 2 months now and there is still no good indication of any strength in the market. This quite builds up some level of anxiety as it is still unclear where the market will go. In my opinion, I’d rather watch from the sidelines how the market would progress. I’d get inside the market only if the index is able to move above the resistance line from March