StockWatch (Aug 29 – Sep 2): PSEi, ORE

PSEi (Chart: Daily Resistance: 4400 Support: 4300/4220/4180)

The index is still on a sideways movement, treading the line plotted by the 65 day moving average. Whatever gains made on Tuesday was taken down on the succeeding days of the week. So it’s still a power play between the bulls and the bears, with the bears slightly winning because the upward movement of the index was not sustained (i.e unable to create higher peak).

The only solace that we could find in the current condition is the fact that the index still hasn’t nose dived again like it did in the second week of August. So we might be seeing a slow decline in the index for the succeeding weeks, but at least it is not a sudden decline.

Again expect the index to move sideways ranging between the 65 day moving average (4340) and the 130 day moving average (4220).

ORE (Chart: Daily Resistance: 5.74 Support: 5.00/4.80/4.00)
If you are still riding ORE, now is the time to get out of the stock temporarily. ORE has had a good run up for the past 2 months. Even with the recent general decline in the market ORE has continued to move higher. But unfortunately the ride will come to a stop and it looks like this is it.

As seen in the chart, it is very evident with the RSI, MACD, and stochastics that the stock is now exhibiting bearish divergence with the stock moving higher, creating a higher peak, while all 3 indicators are creating lower peaks.

The next support for this stock in near 4.80, if support holds, then you could buy back a smaller portion just to take advantage of the possible bounce, but do not hold it for long.

StockWatch (Aug 22-26, 2011): PSEi

PSEi (Chart: Daily Resistance: 4440/4500 Support: 4340/4200)

The index made no progress for last week. It went flatly sideways with high instability. Progress made by the index on one day is taken back on the next day. The sideways movement of the index last week would definitely be an indication that the bounce from the market crash 2 weeks ago has reached the maximum height. There are no bullish indications on the chart that says otherwise.

For next week expect further sideways to downward movement. It is highly possible that the index would just range between the current high and the 130 day moving average.

StockWatch (Aug 15-19, 2011): PSEi

PSEi (Chart: Daily Resistance: 4330/4440/4650 Support: 4170/4080)

The index continued its downward movement creating a very large downward gap on the second day of trading.

The support that I was expecting near 4330 which is the 65 day moving average was not able to contain the strength of the bears which resulted into further downward movement towards the 130 day moving average near 4170. Luckily, support at the level of the 130 day moving average was able to hold the bearish action from further strengthening.

The succeeding trading days saw the index bounce from the 130 day moving average and even closing the gap that was formed on Tuesday. Question is whether this incident would usher the continued upward movement for the index? Well, I believe otherwise. Even though the gap was closed, that incident is not a veritable comeback of the bulls. It was just a natural reaction to the RSI level reaching the low of 30 level. If that was a real comeback for the bulls, then the last trading day would not have formed a short real body with a very long upper shadow; preventing the index to move above the 65 day moving average. The last trading day showed that bears still have influence over the index.

For the succeeding days expect a ranging action in the market. We will be seeing a battle between bulls and bears as the index move between the 65 day (red line) and 130 day(yellow line) moving averages.

StockWatch (Aug 8-12, 2011): PSEi

PSEi ( Chart: Daily Resistance: 4560 Support: 4400/4330)

The index had a short upward movement last week, but was probably capped by financial events occurring in foreign markets. After the short 1st day upward movement, the index went down and broke the standing rising wedge.

Downward target value for the rising wedge would be near 4260. However, the 65 day moving average is on the downward path of the index and this may provide support for the index. The strength of support at 4260 is still something to see, but I’m hoping that the index does not go below that level so that the upward movement of the index would remain intact.

Expect continued downward movement for next week. A bounce may occur probably towards the end of next week or once RSI level reaches near 40 level. Sell for now, or you could wait for the bounce to happen before completely unloading your stuck positions.