StockWatch (Sep 13 – 17, 2010); PSEi

PSEi (Chart: Daily Resistance: 3902 Support: 3435)

The index is very much on the doorstep of the previous high of 3900. Next week would be a deciding factor if the index would be able to break away from the previous high of 3900. I believe that we would be seeing lots of selling action next week as the RSI is way too overbought. If the index starts to move downward next week, watch out for support when the RSI gets near the 50 to 60 level. Even if the index would not be able to move beyond the resistance line, just the 2 week rally accompanied with a large value turnover somehow gives some form of assurance that breaking of previous high is not far away.

Also, I noticed one very promising thing when I looked at the index’s quarterly chart. If my Elliot Wave count is correct, we might now be in the 3rd wave. Usually the 3rd wave is the longest wave and just looking at how long was wave 1, it just leads me to speculate that wave 3 might be atleast twice that of wave 1. This is definitely a trader’s heaven and a time to go long.