StockWatch (Jan 30-Feb 03, 2012) PSEi, CEB, ABS

 PSEi (Chart: Daily  Resistance: 4760   Support: 4590)

As observed, the negative divergence seen in the charts 2 weeks ago has manifested as the bearish event that happened last week.  The index took a dive but was able to recover on the last trading day.  

The white candle that was formed last Friday seems to have some backing of the bullish traders because the value turnover for that day was almost as high as the value turnover  on Thursday.

With regards to area patterns, we can see that the recent bearish activity broke the standing support line that was formed since the start of the year. That line can be interpreted as the lower line of an upwards channel which has a target level near 4550.

Now considering that the recent bearish activity broke the support line, it is possible that the continued “bullishness” last Friday is just a return move to the support-turned resistance line.  One thing to observe for the coming week, is if the index can rise above that support-turned resistance line.

Also, be on the lookout for the impending small head and shoulder formation.  It is possible that the return move might not be able to go above the resistance line and might turn into the right shoulder of the head and shoulder formation.

For next week, if you would try to take advantage of the “bullishness” that started last Friday, do dispose all of your positions IF the index is unable to move above the resistance line. If that occurs, that is a definite sign of weakness for the index.

 CEB (Chart: Daily Resistance: 69.80  Support: 65.25)

As I have posted last December,  for those who would like to go long on a stock, CEB is one stock that you could put in your long term hold list.   As of last Friday, this stock was able to create a new higher low, which means, this stock is now slowly moving its way back to the trader’s list of buy items.

Looking at the white candles formed, we can clearly see that volume is significant, which means there is a growing demand for this stock.  So if you would like to take advantage of this stock while in its early stages of growth, now is the time to do that, provided that you are willing to go long. Coming from a downward trend for more than 1 year, you definitely would not see this stock immediately skyrocket with its price.   There will be a sideways movement before this stock starts to trend upwards, that is why this stock is only for those who can hold this for the long term.  But definitely, your waiting will be rewarded later on.

ABS (Chart: Daily   Resistance: 34.60   Support: 32.32/30.30)

Looks like there is renewed interest for ABS. Coming from a downward trend for more than a year; this stock has started the year right by creating a new higher low, which means it is now slowly recovering from the bearish trend.

Seeing the volume on white candles formed in the past 2 weeks, I can say that like CEB, this stock is now slowly making its way to trader’s buy list.

As of the moment, the bullishness of this stock is stopped by the resistance line at 34.60.  RSI is very much overbought so expect that the resistance line would hold its ground and the stock would start going down this week, which would probably give you an opportunity to buy this stock between 31-32 price levels (or lower).

Observe by next week if the stock would be able to again create a new higher low, which is a further confirmation of the stock’s recovery.

If this stock remains bullish by next week and breaks the resistance line, the target level of the breakout of the channel area pattern would be near 39.

StockWatch (Jan 23-27, 2012) PSEi

PSEi (Chart: Daily Resistance: 4747   Support: 4635/5460)

The index made history once again as it moved higher creating new high for the market.  I was expecting the market to move downward last week, but bullishness sentiment was very evident that the index only had 2 days of downward movement and then continued creating new high.

One thing to look out for this current bull market is the possible formation of a negative divergence as can be seen in the RSI.  We are now creating new high on the index, but the RSI is not in-synch and still hasn’t surpassed the previous high for the RSI.  Also, I think we are now starting to form a rising wedge, a possible reversal signal, which is a bearish event.

For the succeeding days, exercise caution on buying stocks.  I would recommend keenly observing the market and selling a portion when signs of weakness are detected on the stocks you currently hold.

StockWatch (Jan 16-20, 2012): PSEi, MEG, RLC

PSEi (Chart: Daily Resistance: 4660 Support: 4560/4530)

We officially created a new high Wed last week, breaking the resistance of the previous high near 4560. Looks like this is the time to bring out the fireworks and celebrate a great start for this year.

Looking at the chart, the dreaded head and shoulder formation that we have been observing has now been invalidated by the creation of the new high for the index. The nearest area pattern that we could see is a large and wide sideways channel, which has the same range as the head and shoulder. With the breaking of the previous high, we could now see our index reaching as high as 5400 which is the target level of the big and wide sideways channel (that was formerly the head and shoulder formation).

However, as of current, we could see profit taking in the market for next week. That may be an opportune time to snatch some stocks and ride the early stages of the bullish sentiment that we now have in the market.

Who knows, this might be the early phase of our leap frog to become the 16th largest economies in the world by 2050 http://business.inquirer.net/39327/philippines-seen-among-top-20-economies-in-next-4-decades

MEG (Chart: Daily Resistance: 1.94 Support: 1.68)

MEG is one of the promising stocks that we have in the market. I say that it is promising because it currently looks like it is forming a symmetrical triangle. Aside from that, the stock has now formed a higher low last Dec 2011 which means it is now recovering from the downward trend that it suffered since Nov 2010.

Measuring the potential upside for this stock, if bullishness enters this stock, we could have a potential upside of up to 2.50 which is a 28% profit from the current price if the current symmetrical triangle breaks out.

As of current, the current price for this stock is now near the resistance line formed since the start of its downward trend since Nov 2010. I don’t see this stock breaking out next week, rather I could see this probably breaking out in 2-3 weeks further. For those who would want to ride this stock, start looking for opportunities next week as the stock moves downward. As long as the stock creates a new higher low, this stock is still in good condition.

RLC (Chart: Daily Resistance: 13.60 Support: 12.08)

RLC is one of the stocks that has been moving bullishly last week. This stock had successive long white candles accompanied by large volume.

It is very evident from the chart that this stock has broken out of a symmetrical triangle with a target price near 14.75. Buying at the current price level of 13.52, will just give you a profit of around 7%. I would recommend waiting for the downward/return move to reach near 12.50 before acquiring this stock so as to maximize profit. I believe that it is bound to go down by next week because the RSI is very much way beyond the overbought level.

StockWatch (Jan 9-13, 2012) : PSEi

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

It was a surprising move for the index to break above the resistance line created since November 2011. The bid head and shoulder formation is still a possibility, albeit decreased in chances of being fulfilled.

We are 40 points away from breaking the previous high created on August 2011. The recent bullishness displayed last week seems to be legitimate. It was accompanied by considerable value turnover, and I could see no bearish/negative divergence created during the making of new highs. Although a very visible weakness was created last Friday’s trading and this could start a downward movement for next week.

I am all hopes that the downward movement for next week would just be a short break before the index continues its upward movement, hopefully making new highs.

Support is near 4410 – 4390 which are respectively the 10 day moving average(red line) and the resistance line from where the index broke above.

As long as the index is able to maintain its current value above the 10 day moving average, bullish sentiment may still be present in the market that could propel the index higher. Otherwise we go back to a higher possibility of the previously observed big head and shoulder formation.

For next week, if you are already making profits, I would suggest to sell a portion for the moment. If the index is unable to hold above 10 day moving average and starts to go to the area where the other moving averages are converging (4300-4250 area) I would suggest to sell all your positions as it would definitely be a sign that bullish sentiment has waned.

Also be on the lookout for a small head and shoulder formation. The current high may be the head and left shoulder at November 2011. It is possible that this may be a prelude to the bigger head and shoulder formation.

StockWatch (Jan 2-6, 2012): PSEi, GLO

PSEi (Chart: Daily Resistance: 4390 Support: 4200)

A prosperous and happy New Year to all of you!

The index ended the year 2011 with high hopes as action on the last trading day brought in bulls which created a considerably large spread between the open and closing price.

Looks like a lot are optimistic that things would go well for 2012 and I also believe that 2012 will start with a white candle considering the large spread created on the last trading day of 2011. But up until when will this last, is something that we need to be keenly observing.

As of current, we are still not out of the woods yet for the worst case scenario of a big head and shoulder formation that we have been tracking since last year. What the index is having right now, that is a sideways ranging movement between 4390 and 4200, is still congruent to the characteristics of the head and shoulder area formation.

In addition to the sideways channel from which the index is moving within the range of 4390 to 4200, there is also the possibility of a double top formation. Both the channel and double top formation have the same downward projection of 4000.

If the double top or channel breaks down, this is one of the clear indicators that the big head and shoulders formation is still in play. A break above the channel is a positive thing which can lessen the possibility of the big head and shoulder formation from being fulfilled, but I wouldn’t get my hopes high, not until the index breaks above the previous high of 4560.

For this coming week, expect the index to still move upward to sideways. RSI indicates that there is still room for an upward movement, albeit probably short and possibly trying to break above the resistance at 4390.

GLO (Chart: Daily Resistance: 1140 Support: 950/930)

GLO seems to be on its way to recovery, but there is one last test to that statement and that is the resistance at 1140. For the last few trading days of 2011, GLO has been steadily rising accompanied by considerable amount of volume. This means the recent bullishness for this stock has a strong foundation. It even ended the year with a large spread between opening and closing price accompanied with large volume.

So for the coming week, all eyes are on the 1140 level to see if this will be broken by the recent bullishness of this stock. Breaking above that means GLO has recovered 100% from its downward trend from 2009 and 50% from its downward trend since 2007.

If I had this stock, I would sell a portion for the mean time. Although I believe that this stock will be able to break above the resistance of 1140, but I think it wouldn’t be able to do it within the week basing from the RSI that is now way well overbought. There is a chance for a small break above the line, but I believe it would not be able to support that any further as there would definitely be some who would cash on the profits earned from the start of it rise since Dec 13 (that is already about 20% net profit).