StockWatch (Oct 01-05, 2012): PSEi

PSEi (Chart: Daily  Resistance: 5400/5420 Support: 5310)

The index is currently being supported by the 10 day MA, preventing it from moving further down.

What seems to be forming now is an upward channel instead of a rising wedge because of the sideways movement that the index generated last week.

We see that the index is now just a few points away from reaching the index’s all time high near 5403 and this would definitely be a serious resistance for the index.

Right now the R-squared (blue line) is starting to dip, which means the index is losing strength, but the Stochastic Momentum index, RSI and MACD are all climbing up, so be on the lookout for a possible divergence, where the index moves higher than the  recent high, but other indicators are unable to do the same.

StockWatch (Sep 24-28, 2012): PSEi

PSEi (Chart: Daily      Resistance: 5370   Support: 5400)

The existing resistance line proved to be a strong hindrance to the upward movement of the index.  The index was only able to go as high as 5367 before buckling down to close at 5350.  

The bears have shown their strength through the resistance line, it is now a wait and see if the bulls will also be able to show their strength if the index is supported from falling further by either the 10 or 50 day MA.   If the bulls are able to do so, then we may be seeing our index trade in an upward biased trading range between the resistance line and 10 day MA.

If the bulls and bears battle it out, then we may have a possible upward channel or worst case a rising wedge, which is a bearish formation.

For now I would suggest to hold off any plans of buying until probably the index is able to move above the resistance line and the MACD is able to hold its position above the zero line.

It is not yet time to unload, but if the rising wedge does materialize, then start thinking of unloading on the way up.

StockWatch (Sep 17-21, 2012): PSEi

PSEi (Chart: Daily      Resistance: 5360         Support: 5230)

The index was able to gain some positive movement on the last trading day last week, but stopped short just below the support-turned-resistance line.

All indicators are confirming the recent positive movement.  We now only have the support-turned-resistance line to conquer and it is a wait and see moment if the index has the strength to sustain the recent upward movement and cross above that resistance line.

If the index is able to move above the resistance line, this can be a signal to get in the market once again.

Do watch out for the RSI, as it nears the overbought level.  If the index has the strength, RSI @70 would not even matter, but if otherwise, that RSI level can be a resistance for the index.

StockWatch (Sep 10-14, 2012): PSEi

PSEi (Chart: Daily      Resistance: 5230/5320            Support: 5170/5110)

It has been three weeks now and the index is still moving sideways.  The general sentiment of the market, expressed by the chart is one of indecision.

Looking at the R-squared and Line regression slope, we could see the green line(linear regression slope) just a few ticks away from its centerline (green horizontal line), which means we may have a positive trend, albeit for the short term, but the blue line (r-squared) is now near its lowest.  So we might be having a positive movement for the index, but something that might not be sustainable.

The MACD seems to be confirming the positive movement as it is about to cross above its signal line.  But the small opening or distance of the MACD to the signal line seems to also confirm that the cross over might not have the strength to sustain its position.

Do watch out for the following resistance line on its way up: 5230- 50 day MA and 5320 the support-turned-resistance line connecting the troughs of June to July.

StockWatch (Sep 3-7, 2012): PSEi

PSEi (Chart: Daily      Resistance:5230/5280             Support: 5110/4880)

The index broke down from the symmetrical triangle 2 weeks ago, and its downward target level is near 4880 which is also the line of the 200 day moving average.  

So the question is, will the index plunge down to the 280 day moving average? 

Currently, thanks to the 100 day moving average, the index is still hanging on that line. We could see that even if the index moves lower than the 100 day moving average, it still manages to close near the 100 day MA.  So there are still a relatively stronger force in the market that is preventing the index from further breaking down.

Where the market will head to on the short term is something that could not be ascertained, as we have been moving sideways on the short term for the past 2 weeks. 

On the long term outlook, we have a strong downward trend given that the index broke down not just from the symmetrical triangle, but the 10 and 50 day moving average.  If the index breaks above the 10 day moving average (or the 50 day MA), this is not yet a sign of resumption of the upward movement because we still have the previous support turned resistance line blocking the index’s way.

On the top of the chart, you could see a blue and green line. The blue line represents the R-squared and the green line represents the linear regression slope.   The green line shows the trend, a positive (above zero green line) or negative trend (below zero). The blue line shows the strength of the current trend. 

The green line confirms that we are on a downward trend. The blue line tells the strength of the downward trend, and right now, it confirms that the downward trend is strong, which re-affirms the break down from the symmetrical triangle, 10 and 50 day MA. 

What is interesting though is that the green line seems to be arching its way upward, which means we are having some positive trend, the big BUT is that the blue line seems to be moving downward.  Putting those two lines together means, we may be having some positive upward movement, BUT, the movement might not be that strong. 

Do watch out for a bounce and retracing of the index back to the resistance line near 5230.   If the index is unable to move above the resistance line, it confirms what the green and blue line seems to be indicating.