StockWatch (Jul 23-27, 2012): PSEi

PSEi (Chart: Daily      Resistance: 5252         Support: 5180/5070)

It seems that the recent 3 week bullish activity that propelled the index to new highs was unable to sustain its upward momentum and right now with the past 2 weeks of downward movement, the gains made on that 3 week bullishness is now 50% gone.

The index is now below the 10 day moving average, which previously stood as a support line and is now a resistance for the index.   As long as the index is below the 10 day moving average, I would like to suggest avoid buying and just maintain your position or lessen it.  

Do watch out for the 50 and 100 day moving average that is just a few points away from the current index level. If the index moves below that 2 moving average lines, be prepared for a long wait before the index is able to create a new high.

StockWatch (Jul 09-13, 2012): PSEi, PX

 PSEi (Chart: Daily      Resistance: 5400         Support: 5287)

Last week, the index proved me wrong on all possible area patterns that I saw and instead pushed further upward creating a new high.  I am a little bit skeptic on the bullishness that the index is displaying now.   After large drops on previous weeks of trading, I was surprised to see the index creating a new record high and even gapping up on the start of last week’s trading.  I was expecting the index to meet strong resistance on approaching the previous high, especially because of the drop that happened on the second week of May.  But I guess a lot of traders are bullish on the market right now, hence the previous high being easily overtaken.

For next week, do observe the market, we can see that the RSI is now near overbought level with three weeks of upward movement for the index, it is possible that it would succumb to the resistance brought about by the RSI  near level 70.

Support is near 5287 which is the 10 day moving average for the index. For the past 3 weeks, the 10 day moving average has been providing support, so if the index moves below that, do sell a portion for the mean time.

PX (Chart: Daily         Resistance: 24.90        Support: 23.20)

PX is exhibiting characteristics of a symmetrical triangle.  This is supported by the diminishing volume as the triangle nears completion.   Right now, this stock is almost near 1/3 away from the formation of the triangle’s apex, so watch out for either a break out or break down of this stock in the coming weeks.

Upward target price for this stock is near P30, while downward target price is near P18.

StockWatch (Jul 01-06, 2012): PSEi

PSEi (Chart: Daily      Resistance: 5330         Support: 5180/4860)

Just as we are getting the hang of the ranging movement of the index, the index made an unexpected move last week, where instead of following the ranging movement that it has been doing, it broke above the channel area pattern.

As of Thursday and Friday last week, the index has created a new resistance level, almost reaching the previous high created last May.

So what is the index now up to?  Couples of area patterns are fitting the current conditions of the index. The very evident is a possible big and wide ranging movement.   Second that I could see is a possible cup and handle formation, a bullish continuation pattern, considering the previous trend is upward. The third is a possible double top formation if the index is unable to go beyond the previous high.

All of the possible area patterns that can be matched for the index’s current situation have something in common, that is, its next movement would be a downward movement. So expect further downward movement next week.  Succeeding downward movement will eliminate one by one the 3 patterns that matched the current conditions.