StockWatch (Jun 18-22, 2012) PSEi

 PSEi  Weekly Chart

PSEi (Chart: Daily      Resistance: 5109         Support: 4929/4909)

Apologies if I haven’t been posting any analysis on the blog for a month. I was on a month long job assignment outside of the country and I wasn’t able to monitor the local stock market.

I was surprised that a lot has happened for a month, particularly with the index falling 400 points on May and more recently the 200 point drop from last week’s trading.

A lot may be wondering where the index is headed, and from the looks of the daily chart, the index is still in a sideways movement between 5109 and 4909.   With the RSI chart, we can see that the index is definitely undecided where to go as seen by the zigzagging action, crossing above and below the 50 RSI level for 3 weeks now.

However, looking at the weekly chart, particularly the MACD opening wide downward, the index is more likely to move lower in the long term, so it is possible that what we are seeing now is just a pause before the continuation of the downward movement.

For next week, if the index continues to move lower than the support line at 4909, then this would be a breakdown of the current sideways channel. Target level for this would be near 4700.   I would suggest staying on the sidelines for the mean time until at least the MACD has crossed above the center line again.