StockWatch (Sep 6-10, 2010): PSEi, BPI

PSEi (Chart: Daily Resistance: 3739/3900 Support: 3566/3451)

The index had a good rally last week, with a gap forming on the third day of trading. The gap was accompanied with large value turn over, so this gives credibility to the rally and gap.

Something to watchout is the upcoming 3900 level, which was the previous high of 2007 that started the bearish sentiment from 2007 to 2008. This is undoubtedly a major resistance to watch out.

Also, the index is once again in the overbought level, watchout for the RSI whether it would be able to supersede its previous high. If not, this may be exhibiting a bearish divergence where the index was able to move higher, while the RSI wasn't able to do the same.


BPI (Chart: Daily Resistance: 54 Support: 48)

The long awaited breakout happened for BPI last week. One could say it’s a breakout from a complex inverse head and shoulder formation or a rounding bottom either way both formations point to 65 as the target price. However, expect a downward movement next week for the short term as the RSI is very much overbought.