In the past 2
weeks the index has been volatile. We
can see in the chart that for the past 2 weeks, the index has been intermittently,
for every 2-3 days, having a black(red) candle stick. If that pattern is reliable, the index is due
for another black candle within the week.
Even if we do
not base it from the above observed pattern, we can already visibly see a decline
of confidence with the market, seeing the RSI, MACD and the Stochastics moving
down.
In the weekly
chart, a possible hanging man is spotted on the last trading day of last
week. A hanging man is a bearish
reversal. The indicators does not
clearly display the same sentiment as all of them are moving upwards, but
looking closer, we can see that the RSI is now very much overbought giving
credence to the hanging man candle stick.
Right now the
index is moving in a tight upward channel between 6080 to 6240. The 10 day Moving average is also in the same
range. The 10-day moving average has not
been breached lower since the start of the year, so we are expecting this to
provide strong support. The index may
still move higher next week, but do watch out if the index moves lower than the
10day moving average. Hold the buying
for the moment, and if the index moves lower than the 10 day moving average,
start to sell.
PNX (Chart:
Daily Resistance: 10.40 Support: 9.60)
PNX caught my
attention due to its unusual white candle accompanied by large volume. This seems to be a breakout of a channel, but
its target price is already reached.
Plus, the RSI is now overbought.
This does
present a possible opportunity, but it is not yet recommendable to buy now
given that the RSI is overbought and the target has been reached. It is possible however that this transforms
to a flag pattern, so do watch out for that possibility.
For those who
are risk averse, you can buy this stock as long as it does not go below support
of 9.60.
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