StockWatch (Jan 11-15, 2010): PSEi, EEI, ALI, CYBR, AT

PSEi (Chart: Daily Resistance: 3077/3130 Support: 3015/2979)

First happy new year to all of you! This is my first post for the year 2010.

I was actually hoping for a stock market blast on Dec due to window dressing, but the market action last Dec was not as expected. As of current the index is still moving sideways, and previously every sideways movement comes with a short rally that would bring the index higher. That is something to watch out this time because the index moved lower last Dec and hasn’t been able to move higher than 3130, the previous high from Dec 2. If the index is able to move higher than the previous high, then good for the index, because it means there is still some steam left, but if it is unable to move beyond the previous high, we better lessen our positions as this could indicate the start of the market’s descent.

The market in general is still bullish as indicated by the RSI always pulling up when it reaches the 50 level. But for how long the index could sustain this is left unanswered.

Also another thing to watch out is the MACD crossing below the center line. As of current the MACD is still safely above the center line, with the MACD opening upward so we can probably expect further upward movement by next week. Again, since the index has been moving sideways, trading strategy would be to range trade and as much as possible avoid going long.

EEI (Chart: Daily Resistance: 2.80 Support: 2.40)

EEI had a large volume and large spread on Wed and Thursday last week. I could not see any formation, at the very least, it could have broken out of a sideways channel with a target price of above 3.0. Currently the stock has already reached 2.80, so it is not a good idea to buy at the current level. This stock had a correction on the last trading day last week, and the good news is there was not much volume on the downward movement. So this means a lot are still hoping for this stock to move higher. Try to wait for the stock to move lower near 2.50 to 2.60 level before buying. Also watch out for the volume of the downward movement. Larger volume on the downward movement means you should avoid this stock.

ALI (Chart: Daily Resistance: 12.75 Support: 10.50)

Watchout for ALI as the MACD tries to cross above the signal line and the center line as well. Trading last Friday was accompanied with a considerable large volume. The 65 day moving average is currently blocking the upward movement, but I think this will easily be surpassed by this stock. Again keep watch of the volume for signs of weakness.

Other stocks:

AT and CYBR seems to be moving with volume. CYBR is currently overbought but this can still move towards 0.75, which is a previous high. AT also had large volume last week and it can still move higher, only problem is that it is already overbought. On both stocks, you can probably wait for a return move before buying.