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.