StockWatch (Feb 15-19, 2010): PSEi, ORE, MBT, ANI, CYBR, LIHC, MRC

PSEi (Chart: Daily Resistance: 3013/3133 Support: 2930/2797)

The index had a late rally, the downward movement extended for the first 2 days of trading last week and the expected rally only started on Wed.

For the coming week, I believe that the rally would still extend based on the large value turn-over last Friday. Upcoming resistance for the index is at 3013 which is the 65 day MA. I believe that this rally is not yet a time to go long. Though the MACD is starting to position itself for the cross above the signal line, the MACD is still below the centerline, which means we could buy but not yet for the purpose of going long on the stock. I am expecting that the 65 day MA and the previous high would prove to be a strong resistance and it would just push the index to move sideways, before moving south again.

General note: Beware of stocks that are moving upward with not much volume. These are potential bull traps.

ORE (Chart: Daily Resistance: 2.3 Support: 1.52)

On the onset of the rally, ORE has broken out of a flag formation. Volume last Friday was very large so expect for the rally to continue next week. Target price for this stock is at 2.3

MBT (Chart: Daily Resistance: 43.50 Support: 39)

MBT also has broken out of a downward channel. Target price for the stock is at 43.50, but has the potential to reach 45 which is also the 65 day MA

ANI (Chart: Daily Resistance: 25 Support: 16)

ANI does not have any area pattern where it has broken out from, but I believe that this has potential of moving towards 25. Volume last Friday was relatively the same as the volume last Tuesday, so the bulls are slowly moving back. It is possible that we might be seeing a V formation here if volume on Monday would be the same as volume last Friday.

CYBR(Chart: Daily Resistance: 0.75/0.87 Support: 0.70)

CYBR’s daily chart is very promising. Last January the stock formed a symmetrical triangle which broke out on the last week of January, with the target price nearly reached. This time around, there is another possible symmetrical triangle forming, with resistance at 0.75. This has a potential target price of 0.96.

But zooming out further, we are probably witnessing the formation of the right side/wall of a rounding bottom area pattern. The left side of this formation started last July of 2009 and it seems we are near to the completion of the right side. This has a potential upside of 1.25. So be on the lookout for the breakout of this stock.

LIHC (Chart: Daily Resistance: 8/8.50 Support: 5.00)

LIHC does not have any area pattern where it broke out from, but trading last Friday had a very large volume that it is hard not to notice this stock. This stock has the potential of moving towards 8.50 which is the level where the 65 day MA and 130 day MA are converging. But before it reaches that level, it has to break above the 260 day MA at 8.00.

MRC (Chart: Daily Resistance: 1.06 Support: 0.77)

MRC has the potential of forming into another flag formation, with trading last week forming another possible pole for the flag formation. But you’d have to be cautious in buying this stock because it is currently very much overbought. This may at anytime give in to selling pressure.