StockWatch (Jan 31- Feb 04, 2011):PSEi, ORE

PSEi (Chart: Daily Resistance: 4026/4126 Support: 3880/3726)

The recent bus bomb blast incident made a mark on the index as seen on the day after the incident (Wed) with a black candle and large value turn over. This however, did not have a lasting effect, as on the following day, the index recouped losses with an equal amount of value turnover. This is a positive event for the index, however, it is still not a strong indication of bullishness as it was followed by a black candle again with considerable value turn over. So as you can see, the index is still mixed and there is still no strong indication of direction. For the coming week, the index may move upward towards resistance near 4126, but even with that movement, the index is still on a sideways movement with a slight downward skew. Observe if the index will be able to move beyond the resistance line, if it does, then hopefully this would be the start of continued upward movement for the index.

ORE (Chart: Daily Resistance: 3.50 Support: 2.92/2.66)

The last trading day of ORE saw a black candle with a very large volume. Logic dictates that this stock should be avoided. However, I’m inclined to think otherwise for the reason that the stock is now very much oversold with the RSI going below 30 level. If the stock continues to move downward, I believe that it would not be able to sustain the downward movement any longer and eventually bounce back up. The bounce can move towards 3.50 for a quick profit of around 10%

StockWatch (Jan 24-28, 2011): PSEi, CEB

PSEi (Chart: Daily Resistance: 4040/4065 Support: 3940/3880)

PSEi action for last week was very much unexpected. After a prior week of large value turnover, I was expecting for the index to push further up until the resistance line of the sideways channel. However, the 65 day MA proved to be a strong resistance and pushed the index down for the week even breaking the existing sideways channel and creating new low. The index is currently supported by the 130 day MA and looking at the RSI being oversold, I think this will probably provide support for the mean time and push the index back up to the resistance line of the downward channel. In the short term we are moving downwards, but in the long term, we are still moving sideways up until we break below the support line near 3840 (the support line that connects the low of Feb and May 2010). So for the coming week, it would be a chance to sell for the mean time if the index bounces from support for all those who were stuck during the downward movement.

CEB (Chart: Daily Resistance: 102 Support: 86)

CEB would definitely benefit from the market’s bounce next week if the index’s 130 day MA holds. CEB has been very much oversold with the RSI falling below 30 level. In addition to that, recent action on this stock saw an increase in volume for the last 3 trading days, with Wed marking strength with the hammer formation, supported by succeeding buying action on Thursday and Friday. So expect that this stock will still move upward next week. However, the upward movement might not go that far because there is an upcoming resistance near 102. If the resistance is broken, expect possible upward movement up to the next resistance at around 115.

StockWatch (Jan 17-21, 2011) PSEi, AP, ELI

PSEi (Chart: Daily Resistance: 4180/4260 Support: 4000)

The index opened the week with a downward action, breaking the 65 day MA on the first trading day. It continued its downward movement the following day, creating a gap down and further breaking the support line. The breaking of the support line was a crucial event which would determine if the sideways movement would stop and the possible ascending triangle will dissipate. Just as all hope was lost on the breaking of support, the last 2 trading days saved the index from further demise. The last 2 days of last week saw the index bounce from the lows of the second day, even covering the gap that was created. All of these bullish actions were accompanied with large value turn over.

So what does this mean? It means the index is still on a sideways movement, which is a better predicament rather than moving downwards. The ascending triangle that I was hoping to see will not materialize, but instead, with the creation of the recent low, the ascending triangle formation I was hoping, got transformed into a sideways channel connecting the low of Nov 30, 2010 and the low of Jan 11 for support and connecting the peaks (Nov 22, Dec 9, Jan 4) as resistance.

For the coming week, expect the index to move upward towards resistance near 4260. If the index breaks above the channel, we may see the index moving toward 4500 level. Otherwise, if resistance is strong, expect a ranging movement for the index within the channel I mentioned above.

AP (Chart: Daily Resistance: 30.10 Support: 26.20)

AP’s last trading day saw a white candle with very large volume and it also created a gap up. All of these point to a bullish action for this stock and possibly an upcoming breakout from a downward channel. The resistance of the channel is at 30.10 which is also the 65 day MA. A break above this resistance line accompanied with large volume can propel the stock to the target price of around 35. This stock is definitely a buy. Just watch out for resistance near 32.50 which is a previous high.

ELI (Chart: Daily Resistance: 0.76 Support: 0.69)

ELI had a bullish run-up last Wed and Thurs, followed by a sell down last Friday. The run-up was probably a reaction to the breaking of a large symmetrical triangle spanning from Aug 2010 to present. There is also a small downward channel from Oct 2010 to present. The target price for the channel has been reached near 0.65 while the symmetrical triangle’s target price near 0.76 is near the current price. However, though it may seem that there is no more chance to capitalize on the breakout since the channel’s target price has been reached, while the symmetrical triangle’s target price is already near the current price, there is still a higher possibility that there is more momentum to this stock for the reason that the sell down last Friday had a relatively low volume compared to the 2 day run-up volume. For the coming week, be on the look out for a possible pennant/flag formation, which means expect for selling action for next week to form the pennant/flag, hopefully not closing the gap created. If a pennant/flag formation does materialize, next target price is near the previous high at 0.95.

StockWatch (Jan 10-14, 2011): PSEi, PCOR, LR, CYBR

PSEi (Chart: Daily Resistance: 4246/4260 Support: 4180/4090)

As expected the index went sideways to downward. It is currently trading in a very narrow channel, between the 65 day MA (4180) and the resistance connecting the previous highs. The last trading day last week saw a black candle accompanied with large value turnover and because of this, I believe that it won’t be long that the 65 day MA would be broken and we would see the index moving downwards towards support at 4090. Do observe if the support holds, if this does hold, then we have an ascending triangle formation for the index which is a good sign.
 

PCOR Weekly

PCOR (Chart: Daily Resistance: 19.98 Support: 17.50/15)

PCOR has been very bullish since November last year and has been accompanied with large volume. However, this bullishness is now capped by an bearish engulfing pattern on Tuesday last week with substantially large volume and has since started the downward movement for the whole week last week. The MACD is about to cross below the signal line, the RSI as well displays some bearish divergence, the stochastics as well is displaying bearish signs. The weekly chart is also displaying bearish signs, the black candle is accompanied by an almost equal amount of volume from the previous week. So for the coming week, do expect the bearish sentiment to continue and break the support line. Next possible support is at 15 which is the previous low and at the same time the 38.2% Fibonacci level from the start of the run up. Usually when a stock comes from an exceedingly high RSI value, the 50 level usually acts as support so do also watchout for that event for a possible short bounce back up to the support-turned-resistance line, your second chance at getting out if you get stuck by next week

LR Weekly Chart


LR (Chart: Daily Resistance: 6.00 Support: 4.25/2.62)

Looking at the weekly chart, LR had a breakout last Friday from a rounding bottom formation. Target price is near 8.00. The stock however is very much overbought so be cautious in trading this stock. Sell on the first sign of weakness or signs of reversal.

CYBR – Weekly Chart

CYBR (Chart: Daily Resistance: 1.05 Support: 0.74/0.64)

CYBR had two significant events last week. Looking at the daily chart, we can see that the recent bullish run saw the stock breaking the very long symmetrical triangle. The target price of the symmetrical triangle is near 1.05 which is now nearly achieved last Friday. The second event is the breaking of a cup and handle formation or a rounding bottom formation seen in the weekly chart, and the target price of this breakout is near 1.50. Do exercise caution in trading this stock as the immediate target price is almost achieved, getting in at this point to capitalize on the breakout of the cup and handle formation is very risky. Wait for the correction before getting in this stock.

Run for It! PSE Bull Run 2011

What: PSE Bull Run 2011
When: Jan 9, 2011, Sunday
Where: Fort Bonifacio Global City in Taguig

Absolute Traders will be at the PSE BullRun, in line with their commitment to teach interested people to learn how to invest, trade and maximize opportunities in the stock market. AT supports this yearly activity by the PSE to generate awareness about the benefits of investing in the stock market, and spread awareness of the PSE as an instrument for economic development.

StockWatch (Jan 03-07, 2011); PSEi, MPI, MER

PSEi (Chart: Daily Resistance: 4235/4239 Support: 4174/ 4040 )

First of all Happy New Year to all of you!

The index, from the first look, seems as if it is forming an inverse head-and-shoulder formation, which is something that I was hoping for last year, but from the last trading day of 2010, it somehow does not support this case. Last trading day for 2010 saw the index form a black candle with relatively large volume, which is not a good sign. The large volume on the last trading day would have complemented the inverse head-and-shoulder formation if it was a white candle. A black candle means there is doubt on whether the upward movement can still be sustained. Although still do watch out for the neckline near the level of 4235. If a break out happens, then we do have a successful inverse head-and-shoulder. Otherwise, we may see the index moving sideways to downward for the coming week. I am more inclined to think that this will be a sideways to downward movement for the earlier reason that there was a large volume on the black candle of last trading day. But even though the inverse head-and-shoulder does not push through, the index may be forming an ascending triangle formation if the resistance holds, which is what I think would most likely to occur.

MPI (Chart: Daily Resistance: 4.44/4.20 Support: 3.76/3.43)

MPI seems to have broken out of an inverse head-and-shoulder formation. The breakout day had a very large volume and long spread. Target price for the formation is at 4.20. Resistance is at 4.44 which is the previous high. Support is at 3.76 which is near the neckline of the inverse head and shoulder.

MER (Chart: Daily Resistance: 236 /250 Support: 212/200)

MER looks as if it has broken out of an inverse head-and-shoulder formation, but technically, connecting the neckline does not show a breakout from the neckline. The breakout is more of a break out from a triangle. The good thing about the breakout is that it was not just a breakout from a triangle, it was also a breakout of the channel that existed since early 2010. The first time the channel was broken was last Sep 2010, but the stock went back inside the channel by Nov. This recent activity of once again breaking above the channel puts the stock in a bullish position once again. The target price for the breakout of the triangle is near 250, but upcoming resistance is at 236, which is the previous high. A little bit of caution though as the successive gap up for the past 3 trading days might result into exhaustion, just be on the look out for a reversal indicators (island reversal or hammer formation) near the resistance of 236.