SotckWatch (Aug 1-5, 2011) PSEi, ISM

PSEi (Chart: Daily Resistance: 4515/4580 Support: 4450)

The index moved sideways last week and regaining losses on the last trading day.

As of current there is no significant area formation except for a possible rising wedge and this formation seems to be supported by the RSI and the MACD as of the moment. The RSI is near overbought level while the MACD has crossed below the signal line.

One good thing to point out though is that value turnover on the days when black candles are formed are significantly lesser than value turnover for days when a white candle is formed. This may mean that the bears still do not have the full strength to pull the index downward. But on the other hand, value turnover on the white candle days are noticeably lower than those from the previous 2 weeks which may indicate weakness in the upward movement.

For next week expect a short upward movement or sideways movement for the index. A resistance line is now established at 4580 ( connecting the previous peaks). There is lesser possibility for the index to breach that resistance line if the value turnover continues to be lower than what we had last week.

ISM (Chart: Daily Resistance: 5.19 Support: 4.50/4.00)

ISM went very bullish and created large spreads and gaps on the last 2 trading days for last week. On both days, the white candles were accompanied by very large volume.

This stock is definitely bullish, however, on the last trading day, the stock was not able to create a full body for the white candle, which means weakness on its upward movement.

For those going long on this stock, this definitely has the potential to go up to 8.00 level. But for those whose objective is short term, it would be best to sell for now and buy back probably near 4.00.

StockWatch (Jul 25-29, 2011): PSEi, GLO

PSEi(Chart: Daily Resistance: 4550/4580 Support: 4470/4330)

The run up for the index for the past trading days was capped off with a sell down on the last 2 trading days for this week.

The run up during the past 2 weeks gives us a good indication that the index is well on its way to create more new peaks. As long as the index is creating new higher lows as well, we can go long on our positions.

For the coming week, we may see downward to sideways movement for the index.

Watch out for support at 4330, as long as the index stays above that support level, we still have a good chance of continued upward movement.

GLO (Chart: Daily Resistance: 964/1035 Support: 907)
Looks like GLO has a new lease on life. Since being in a downward trend since 2007, GLO is now showing signs of resuscitated life. The run up that happened this week seems to be further confirmation of the bullishness on the last days of Mar 2011.

The breakout last Wed from the sideways channel has a target price of around 1000. However, the stock is now overbought so expect some dips to happen this coming week.

There are a couple of good signs that affirms that this stock may be on its way to recovery. One of the sign is the 65 day Moving Average, now seen on top of the other two moving averages. The 130 day Moving Average, though not yet in its bullish position, is getting there and is about to cross above the 260 day moving average. Aside from the moving averages, the MACD is now opening upwards. So the possible dip that could happen this week may be a perfect time to get in the stock for those who are willing to take long positions on GLO.

StockWatch (Jul 11-15, 2011): PSEi, PCOR

PSEi (Chart: Daily Resistance: 4460/4520 Support: 4340/4410)

The index had a bullish follow through this week confirming the bullish actions the other week. Aside from the significant follow through, the index was also able to break above the previous high for last year and create a new all time high for the index.

However, the bears are still able to throw their weight on the index considering the large downward spread created on Wed and Thurs last week. Also the current bullishness is still not that widespread to most of the stocks.

This might be the start of the bullish phase of the index coming from a recent sideways movement, but with the still considerable influence of the bears, we’re probably in for an upward crawl or a ranging upward movement for the market.

One could get in the market now and pick stocks to position themselves during the dips. Do observe the support line, you can hold on to your positions as long as the index is creating higher lows

PCOR (Chart: Daily Resistance: 17.20/17.30 Support: 14.94/13.40)

PCOR has been exhibiting bullishness for the past two weeks. On both instances a white candle with large spread was created and was accompanied by large volume as well.

There is a horizontal channel formation with resistance near 17.20. Also with the past 2 weeks, a flag/pennant formation can be seen. The second flag formation is still ongoing, but if this pushes through to breakout, it can reach as high as 18.00.

What would be interesting to observe is that if the second flag formation is realized, the formation would create a large spread for the white candle and if accompanied with large volume, the pole part of the flag formation would also break the current resistance line for the horizontal channel giving the possibility for the stock to reach as high as 21.00, which is the target price for the horizontal channel. It’s like 2 birds hit with one pole. Otherwise, if the second flag formation does not materialize, then it’s just an ordinary ranging action between 13.40 to 17.20.

If you can buy at last week’s closing price of 16.24, there is still money to be made (around 4%) before the price reaches the resistance line, but again that price is very near the resistance line and the stock is very much overbought, so there is a higher possibility for sell down to happen anytime.

For the risk averse, I would suggest buying only when the stock breaks out of the channel. If the resistance proves to be strong, this means we might see continued ranging movement of the stock within the channel.

StockWatch (Jul 04-06, 2011): PSEi, APO

PSEi (Chart: Daily Resistance: 4351/4413 Support: 4250)

The index moved sideways for the week, but made a remarkable comeback on the last trading day. The index was able to move beyond the standing resistance level of around 4340 and at the same time create a new high for the year.

The MACD is now above the signal line and above the center line as well. RSI is not that much oversold and still has room for a little bit more upward movement before it reaches overbought area. Value turnover for the 2 succeeding white candle days were significant enough.

All things are on the bright side, and this could be the start of a continued upward movement for the market. However, I would still err on the side of caution and wait for the follow through of bullish sentiments, if indeed this is the start of the upward movement. For all we know this might just be a continued sideways movement with a wider sideways channel, similar to what happened on the bearish actions two weeks ago, where the bearish action broke the support line and 65 day Moving average but was not sustained.

For next week, I suggest treating the recent breaking of resistance line as part of wider ranging movement of the index. This means keeping your stock positions small (i.e. maintaining a larger cash position) and sell when a resistance level is reached or when RSI reaches 70.

APO (Chart: Daily Resistance: 2.90 Support: 2.30)

APO recently had a very unusual volume last June 24 which created a gap up and a long white candle. The first trading day last week could have well been the start of the stock retracing the gap, but remarkably, it only dipped for 2 days and has since recovered the loss. What is remarkable is that the volume during the recovery period, though decreasing, is still relatively large; large enough to almost cover for the volume on the black candle day.

Looking at the chart from Oct 2010 up to the present, it seems that a rounding bottom was formed and at the same time broken last June 24. Target price for this formation is around 3.50.

Zooming out further, the chart, looking from June of 2007, seems to also have formed a rather big-wide rounding bottom with a resistance of 2.90. If the stock continues to move upward for next week, the big-wide rounding bottom would also be broken. The target price for this formation is around 5.00. You could also interpret the big-wide rounding bottom as either a wide channel or a wide inverse head-and-shoulder formation, either way, all formations have the same target price.

If your investment objective is for the long term, this stock is for you.