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 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.
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