StockWatch (Nov 29 – Dec 03, 2010): PSEi, LR, GLO

PSEi (Chart: Daily Resistance: 4220 Support: 3800)

The corrective C wave happened earlier than what I expected, starting the trading last week with a downward movement which continued for the whole week. The downward movement stopped just on top of the 65 day MA, so it’s a wait-and-see if the 65 day MA would provide support for the index. If the index continues its downward movement going further below the 65 day MA, next support is the 130 day MA at 3800. If the index does continue to move further downward, I believe that it won’t be that long before the index bounces from the lows as the RSI is near oversold level. Look out for signs of reversal, especially the breaking of the downward trend line formed by connecting the peaks of the corrective C wave.

LR Weekly Chart

LR (Chart: Daily Resistance: 2.7 Support: 2.5 )

Looking from the daily chart LR has broken out with large volume from a symmetrical triangle. Its possible target price is at 3.0. The only problem with LR is that every time a break out happens, it immediately collapses and follows the support line. This is also evident on weekly chart, when each breakout happens, it usually is near resistance line and does not move further above that, so next week is a wait-and-see if the recent breakout will push through this time and not collapse. Observe if the volume on succeeding trading days forms a white candle with a relatively large volume (greater than 3M). If the breakout does push through, we may see the stock aiming for the previous high near 4.25.

GLO (Chart: Daily Resistance: 900 Support: 762)

GLO has been bearish all year round, but looking at this daily chart, this stock may now be on its way out of its bearish situation with a possible double bottom. Previous low is near 762. RSI is now very much oversold so watch out for a possible bounce. The neck line for the double bottom is at 905, a break above that with large volume confirms the double bottom formation. The breaking of the neck line is still way too far, but one can make profits by trading the range from the current level to the neck line.