StockWatch (Mar 31 – Apr 4, 2008): PSEi, FGEN, FPH

PSEi (Chart: Daily Resistance: 2970/3000/3200 Support: 2870/2770)

The index had a rally last week, a respite from the continuous selling that has been the general sentiment since February. The index bounced from the low of around 2770 and proceeded to move up until around 2950. As of last Friday’s trading, a long white candle has formed which indicates bullishness. But the question is how long can this bullishness last? Last Friday’s trading for DJIA saw the US index closing lower on further fears of recession. Will the PSEi follow? In my opinion, with last Friday’s trading, there is still a possibility that the rally may extend for this coming week. The index still has room to move a little higher in the very short term before possibly being stopped by a resistance. The index is currently 20 points away from a possible resistance at 2970 which is the short term trend line from Feb 2008 and 50 points away from 3000 which is another short term trend line connecting the troughs of Aug 2007 and Jan 2008. If the index is able to successfully take out the 3000 level, then we may be able to see the index go higher to around 3200-3300. There is still no sign of a reversal, and the downward trend since Feb is still intact so it would still be best to be cautious and stay liquid for now. If the index is able to successfully take out the 3000 level, then probably it would be a buy for the short term hold only.

FPH (Chart: Daily Resistance: 45-50 Support: 39.50/33)

FPH seems to have broken beyond the short term resistance line from Jan 2008. It is interesting to note that the volume on the way up is increasing which gives more credibility to the upward movement. We can probably consider the levels where there is increase in volume as a good support area later on. With the increase in volume on the upward move, there is still a possibility for the price to move higher, probably up to 45-50, level before encountering resistance at 47-50 levels which is the downward trend line from Dec 2008.

FGEN (Chart: Daily Resistance: 45-50 Support: 36.50/29)

FGEN like its parent company FPH also broke out from a short term resistance which is the downward trend line from Dec 2008. Volume is also notably increasing on the upward move. It is also possible that price may move towards 45-50 level before encountering resistance at near 50 which is the downward trend line from October 2008. From the charts there are also 3 successive notable long white candles that formed last week, the 3 advancing soldiers. This is a sign of strength for the stock especially because the pattern is found at the lower end of the price range. How long that strength can last is still not clear as the recent general sentiment of this stock is bearish so the stock will definitely encounter resistance along its way up.


General Note for FPH and FGEN:

Just like other stocks, FPH and FGEN suffered a beating by the bears, so it is not likely that the price will just shoot up to a new high one day. These stocks would still take time to consolidate and will definitely move with in a range. As of the moment, these stock are trading within a downward channel. For those who are willing to take the risk, you can trade that range for these stocks. However one should be cautious and aware that the general sentiment of the market is still bearish and that even if there are signs of strength for these stocks, this does not guarantee immunity from the ill-effects a of general bearish market sentiment.

StockWatch (Mar 17-19, 2008): PSEi

PSEi (Chart : Daily Resistance: 3000 Support: 2870)

The index went lower than the recent previous low of 2950 and proceeded to its lowest for the week at 2890. Next support is the previous low of August 2007 at 2874. Looks like a double top, but ofcourse this is still not confirmed not until the support line (which is the previous low) is broken. However, a lot of stocks are already very much oversold and badly sold down since January 2008, so there is still the possibility of a bounce from the previous low. Looking at the RSI and MACD, we can also see a possible bullish divergence. Watch out for UP days that are not accompanied with large volume. With the recent continuous downward movement of the index, as well as most of the stocks, a large volume is very much important to validate an upward move. Trading strategy would still be to stay on the sidelines, watch out for a possible bounce from the support or break of resistance line with volume. Trading for this week might be lethargic sideways movement as a lot may be on vacation mode already for the coming long weekend.

The following stocks exhibit very low RSI’s: ALI(20) , FPH(18), PNB(19), VLL(14). Watchout for possible bounce from the recent downward move, but ofcourse the low RSI does not guarantee this bounce as the price may still move lower even if RSI is already the lowest of all stocks. Look for large volume on upward movements.

In Retrospect: BPI, FPH

BPI

BPI has now broken out of a downward channel. Last Friday’s close was at 60.50 with around 2.9M shares traded. Based on the breakout of the channel, we may see the stock reach up to 67. However, there are a couple of resistances along its way up at 63 to 65 levels, which are previous highs. Also another word of caution, as for the past 3 days, the stock has been climbing with long bodied white candles; the stock may reach exhaustion levels if it continues to move up with just average volume. Do not forget the upcoming ex-div date at Jan 31, as there might be dumping of this stock once ex-div date is reached.


FPH

The bullish divergence is still intact for FPH as well as the ranging action which the stock has been doing for the past weeks. Watch out for upcoming resistance at 60 and 65 which are previous highs. If the stock is able to move above 60, start selling at 65.

StockWatch (Jan 21-25, 2008): PSEi, BPI, FPH

PSEi (Chart: Daily Resistance: 3370 Support: 2870)

The index had a distressing action last week. I was earlier expecting that the index would somehow follow its usual ranging pattern, however, things started to go haywire on the third trading day with the index successively gapping down. The week ended with another gap down accompanied by large volume. Last week’s action broke 2 important support lines. The first is the support line from Sept 2007, second is the support line since June 2006. This obviously suggests a very bearish market and for the risk averse it would be best to stay as an observer for the mean time. Friday’s trading seem to have formed a hammer, coupled with the index’s oversold state, it may be possible to see a rally next week. For those who are not risk averse, you can take advantage of the rally for some short gains. For those staying on the sidelines for the moment, be on the look out for stocks with bullish divergences and those that are moving positively against the bearish market sentiment.

BPI (Chart: Daily Resistance: 58.50/60/62/64 Support: 53)

BPI is showing signs of bullish divergence with the MACD and RSI creating higher lows and price creating lower lows. The stock bounced off from support at 53 with volume near the average volume of 1.9M shares traded. The bullish divergence and the bounce off from support may suggest that this might be the bottom or a reversal. Observe the volume for the coming week, if the volume exceeds 2M shares on an upward move, this is a good indication that there is strength in the upward movement and we may see this stock move higher. If there is no volume on the upward movement, then it would be best sell immediately. Expect resistance between 58.50 and 60; if it breaks resistance at 60 with volume of above 2M shares, price may reach 64.

FPH (Chart: Daily Resistance: 60/65 Support: 52)

FPH is also showing signs of bullish divergence. Last Friday’s trading was accompanied with above average volume at 1.1M shares traded. It is possible that the stock will move upwards this coming week. Watch out for resistance at 60 and 65.