StockWatch (Nov 21 – 25, 2011): PSEi

PSEi (Chart: Daily   Resistance: 4390/4410/4560   Support: 4280/4200/4180)

The index had a short lived rally on the first 2 days of trading last week, but reversed on Wed and has been moving downwards since.   With the upward movement made by the index on the first 2 days of trading, this confirms a bearish divergence for the index, with the index moving higher and both RSI and Stochastics moving lower.

It is also evident on the chart that the index is no longer able to sustain upward movement as seen on the black candle stick formed on Wed, having a short real body and a long wicker.  This means there were bullish sentiments during the day, but were overcome by bearish sentiments.

Up until when this bearish sentiments would continue is still something to be observed.  As of current, a rising wedge can be seen on the chart and the recent bearish move could be interpreted as a break down from the area pattern.  The possible target level for this area pattern is near 4200.  This is the same level as the previous low last Nov 3.  

It is still a wait and see whether this recent bearish movements in the index would become a full blown bearish sentiment or if support at 4280/4200/4180 would prevent this bearish sentiment to continue.  As of current, the MACD seems to be siding on bearish sentiment, with the signal line just about to cross below the moving average line.

For next week, expect the index to move downward to sideways. Keep watch of the support at 4200, if index moves below that level, it would be prudent to sell for the moment.  Remember that there is still the possibility for the big head-and-shoulder formation to materialize and the index moving below that level would already be 1/3 of its way to accomplishing that area pattern. 

StockWatch (Nov 14 – 18, 2011): PSEi, GLO

PSEi (Chart: Daily Resistance: 4346 Support: 4260/4207)

The index moved sideways last week with the moving averages providing support for the index. It looks like we will be on a sideways movement again next week as several support areas are just near the current index level. Two moving averages are currently providing support, the 10 and 100 day moving average. Just a little bit below that, we can see the support line from Sep of this year at 4260. Then afterwards, there is another possible support line, which is the previous low at 4207 and just a little bit down below that level are the 50 and 200 day moving average. With a lot of support along the way down, it is highly possible we may see the index moving sideways between 4207 and 4346.

One of the things to look out for the coming weeks is the possibility of a bearish divergence happening. Currently the stochastics and the RSI are moving downwards, if the index makes a short rally upward and the indicators still continues to move downwards, we may be seeing a bearish divergence happening. But again, this is just a possibility that we need to closely monitor.

GLO (Chart: Daily Resistance: 965 Support: 890)

GLO seems to have formed a small inverse head-and-shoulder (see the small markings on the right side) area pattern. This is a bullish pattern and when this breaks out, we can project the price to reach near 1100. As of current, this stock may have already broken out of this pattern, with trading action last Friday creating a considerable spread with large volume.

When the target price is reached, we may be one step closer to a much larger opportunity for this stock. Zooming out of the chart, we can see that this stock has a double bottom formation, just waiting to breakout. The break out from the inverse head-and-shoulder would put the double bottom formation nearer the resistance or breakout line. But unfortunately, this is still to be seen and it may take maybe more than a month before this materializes.

StockWatch (Nov 8-11, 2011): PSEi

PSEi (Chart: Daily Resistance: 4345 Support: 4180/4055)

I honestly have been having a hard time determining where the index would likely go for the past weeks. All those times, I was expecting the index to move lower since the index has unceasingly rallied so high for the first 2 weeks of October, and it again unexpectedly continued rallying up until the end of October. However, last week, it looks like reality is catching up with the index, with all the resistances along the way (e.g. the moving averages, the previous highs and the resistance line of the current upward trend), the index seems to be unable to maintain anymore rallies, as evidenced by the big 2 day drop for last week.

For the coming week, expect the index to move sideways to downward. There may be support for the index at the current level as the moving averages are all converging between 4270 and 4160. If not, next support is near 4180, the support line for the current trend and next is near 4055, the resistance-turned-support line connecting the peaks from Aug to Sep.

Note that the big head-and-shoulder formation (with left shoulder from Sept 2010-Mar 2011, head from Mar-Sep 2011) is still a possibility, so keep your eyes peeled especially as the index nears 3715, the previous low from Sept.