StockWatch (Feb 22-26, 2010): PSEi, TUNA

PSEi (Chart: Daily Resistance: 3022 Support: 2940/2787)

The index continued its upward movement last week only to be stopped by the 65 day MA. Expect next week for the index to continue its downward movement. The downward movement on the last 2 days of trading last week was not accompanied by large value turnover relative to that of Wed’s trading, if the value turnover is still low on the succeeding trading days, there is a possibility that this downward movement would be short lived.

Upcoming support is at 2940, which is the 130 day MA. The crossing below the 130 day MA would be an important event to watch out. If the value turnovers of the downward movement on the succeeding days are low, the 130 day MA level could provide support for the index and possibly making it move sideways, moving in between the 65 and 130 day MA. As of current, the MACD is still below the center line, which still tells us that we shouldn’t be going long on the market for now.



TUNA (Chart: Daily Resistance: 2.06/2.16/2.26 Support: 1.86/1.60)

At the time when stocks are moving downward TUNA was pushing upward. Trading last Friday had a very large volume, but the stock seems to have been affected by the general downward sentiment of the market because of the large wicker of the candle which suggests that it was able to move higher but was unable to sustain the level. However, even if it was unable to sustain that level, it was somehow able to stay above the opening price which gave the stock a white candle.

The area pattern last week was a pennant formation and the trading last Friday was the breakout of this pattern. Target price for the area pattern is around 2.25, but there are a couple of resistances along its way up. The first resistance is at 2.06 which is the previous high reached last Friday. Next resistance is 2.16, which is the next previous high from Dec 2009.

Having come from the RSI low of 15 rising immediately to near 70 is definitely a bullish indication. Breaching the 70 level would be extremely bullish. For those who are not yet in this stock and would like to get a piece of action, I would advise caution in buying because the stock is already toppish. I have apprehensions of the stock breaking the 70 level because it started from the low of 15 and that alone is a very long walk. Do watchout for the volume of trading next week. If volume increases on Monday to more than 18M volume, with a white candle formation, then we are probably seeing an extremely bullish stock in play here and breaking 70 level would be a possibility. But if volume by Monday is lower than 18M, then start looking out for weakness on the resistance levels.