StockWatch (Feb 28- Mar 04, 2011): PSEi, CEB

PSEi (Chart: Daily Resistance: 3890/3950 Support: 3650/3630)

As expected, the index moved lower last week, technically due to low value turn over on the run up from the previous week. This however may change for the coming week as the index moved positively last Friday. The small white candle was accompanied with relatively large value turnover compared to the previous days of the week, but still lower relatively compared to the other trading days of the year.

For the coming week expect a sideway to upward movement for the index. But, observe the value turnover of the index. If the index moves upward for next week, this should be accompanied with larger value turnover. Otherwise, the index would either just move sideways or lower.

Upcoming support is near 3650 to 3630 which is also the 130 day MA support.

CEB (Chart: Daily Resistance: 90 Support: 74.50)

CEB has been way below the RSI oversold level of 30 and is at 15 right now. If the market does move positively next week, CEB would be one of the quick profit stocks that you might like to get. Trading last Friday formed a hammer at the possible bottom which is a reversal indicator. This however, needs to be confirmed by the succeeding candles. If the stock moves higher by Monday, accompanied with relatively large volume, this may be the confirmation of the reversal. Even without the confirmation of the hammer, this stock will definitely move upward, the only question is when? For now the oversold RSI level provides us a clue that the “when” part would be in the coming week or next week. The “how much” part is still unclear, but immediate resistance at 90, puts the stock in a very decent profit of around 15%.

Do observe the MACD as well. It seems though that the MACD, is forming higher lows, while the stock still moves lower. If the possible upward movement does fulfill this, then this is probably one stock to consider for going long.

StockWatch (Feb 21-25, 2011): PSEi

PSEi (Chart: Daily Resistance: 3912/3935/4034 Support: 3653)

The index moved higher for last week, however, it was a little bit disturbing as value turn over was very thin while going up. Thin value turnover means we do not have much player in the market. What is keeping players at bay is something I do not know, but if this kind of value turnover continues, I am sure that the index won’t be able to move beyond the support-turned-resistance line from Feb 2010.

For the coming week exercise caution as there is higher possibility that the index would move lower

StockWatch (Feb 14-18, 2011): PSEi

PSEi (Chart: Daily Resistance: 3910 Support: 3700)

The index made a bearish move last Thursday, sending the index down 100 points and breaking the long standing support line from Feb 2010. The two days when the index went lower (Wed –Thurs) was accompanied with higher than usual value turnover and gives an indication of a very bearish atmosphere. However, trading last Friday gives a shimmer of hope for the index because a small white candle was created with larger value turnover than Wed-Thurs. We can see that Friday’s trading seem to have respected the support near 3727. which is a good indication that by next week, we could expect an upward movement for the index.

A word of caution though, since the support line from Feb 2010 was broken, which is a major event for the index, the upward movement that we might see for the coming week might just be a return move towards the same support line from Feb 2010, which is now considered as a resistance. So taking long positions for now is not recommended, not until probably the index is able to break above the resistance line from Nov 2010. One can take positions now for range trading only, taking advantage of the small spread that might occur if the index is able to move up to the support-turned-resistance line at 3910.

StockWatch (Feb 07-11, 2011): PSEi, ORE, FLI

PSEi (Chart: Daily Resistance: 3986/4100 Support: 3831/3727)

Just as I thought that the index would start to move upward, the index moved lower on the first trading day last week and created a gap down. The support-turned-resistance line connecting the troughs of Nov 30 and Jan 11, proved a strong resistance for the index. This somehow confirms that the breakdown last Jan 20 from the sideways channel (Nov-Jan) was not yet finished and it continued its downward movement last week. The sideways channel has a downward target of near 3760 which is not yet reached.

Another observation for the index though is the divergence that appeared with the trading action last week. A bullish divergence appeared, with the index moving lower connecting the lows of Jan 25 and Feb 01 and the RSI moving higher. This indicates an upcoming bullish activity, but there is no certainty as to when this will happen.

For next week, observe if the support holds, this is a major event to be observed for the reason that the current support is also the support line that is standing from Feb 2010. If the index goes below this support line, it would be a very bearish event and may start a long bearish segment similar to 2007-2009 bearish trend. However, if the support holds, we may see the index going towards 4052-4100 level.

ORE(Chart: Daily Resistance: 3.38 Support: 2.70)

The bounce from the RSI lows has happened for this stock. Amazingly, trading last Friday saw a white candle with a very large volume. No formation was broken so we could not say the target price. Upcoming resistance is near 3.38 which is the resistance of the downward channel. If the stock moves beyond the resistance line with large volume, this means we have a breakout of the channel. However, this is still far and unclear if the breakout will happen, so the immediate thing to do is lessen or sell near resistance.

FLI (Chart: Daily Resistance: 1.30/1.35 Support: 1.13)

FLI had a breakout from a downward channel with two white candle both with large volumes. The only problem is that if you were not able to ride this stock at its breakout price, there is not much room for profit as the target price is about 1.30.