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.