StockWatch (Jan 10-14, 2011): PSEi, PCOR, LR, CYBR

PSEi (Chart: Daily Resistance: 4246/4260 Support: 4180/4090)

As expected the index went sideways to downward. It is currently trading in a very narrow channel, between the 65 day MA (4180) and the resistance connecting the previous highs. The last trading day last week saw a black candle accompanied with large value turnover and because of this, I believe that it won’t be long that the 65 day MA would be broken and we would see the index moving downwards towards support at 4090. Do observe if the support holds, if this does hold, then we have an ascending triangle formation for the index which is a good sign.
 

PCOR Weekly

PCOR (Chart: Daily Resistance: 19.98 Support: 17.50/15)

PCOR has been very bullish since November last year and has been accompanied with large volume. However, this bullishness is now capped by an bearish engulfing pattern on Tuesday last week with substantially large volume and has since started the downward movement for the whole week last week. The MACD is about to cross below the signal line, the RSI as well displays some bearish divergence, the stochastics as well is displaying bearish signs. The weekly chart is also displaying bearish signs, the black candle is accompanied by an almost equal amount of volume from the previous week. So for the coming week, do expect the bearish sentiment to continue and break the support line. Next possible support is at 15 which is the previous low and at the same time the 38.2% Fibonacci level from the start of the run up. Usually when a stock comes from an exceedingly high RSI value, the 50 level usually acts as support so do also watchout for that event for a possible short bounce back up to the support-turned-resistance line, your second chance at getting out if you get stuck by next week

LR Weekly Chart


LR (Chart: Daily Resistance: 6.00 Support: 4.25/2.62)

Looking at the weekly chart, LR had a breakout last Friday from a rounding bottom formation. Target price is near 8.00. The stock however is very much overbought so be cautious in trading this stock. Sell on the first sign of weakness or signs of reversal.

CYBR – Weekly Chart

CYBR (Chart: Daily Resistance: 1.05 Support: 0.74/0.64)

CYBR had two significant events last week. Looking at the daily chart, we can see that the recent bullish run saw the stock breaking the very long symmetrical triangle. The target price of the symmetrical triangle is near 1.05 which is now nearly achieved last Friday. The second event is the breaking of a cup and handle formation or a rounding bottom formation seen in the weekly chart, and the target price of this breakout is near 1.50. Do exercise caution in trading this stock as the immediate target price is almost achieved, getting in at this point to capitalize on the breakout of the cup and handle formation is very risky. Wait for the correction before getting in this stock.

Run for It! PSE Bull Run 2011

What: PSE Bull Run 2011
When: Jan 9, 2011, Sunday
Where: Fort Bonifacio Global City in Taguig

Absolute Traders will be at the PSE BullRun, in line with their commitment to teach interested people to learn how to invest, trade and maximize opportunities in the stock market. AT supports this yearly activity by the PSE to generate awareness about the benefits of investing in the stock market, and spread awareness of the PSE as an instrument for economic development.

StockWatch (Jan 03-07, 2011); PSEi, MPI, MER

PSEi (Chart: Daily Resistance: 4235/4239 Support: 4174/ 4040 )

First of all Happy New Year to all of you!

The index, from the first look, seems as if it is forming an inverse head-and-shoulder formation, which is something that I was hoping for last year, but from the last trading day of 2010, it somehow does not support this case. Last trading day for 2010 saw the index form a black candle with relatively large volume, which is not a good sign. The large volume on the last trading day would have complemented the inverse head-and-shoulder formation if it was a white candle. A black candle means there is doubt on whether the upward movement can still be sustained. Although still do watch out for the neckline near the level of 4235. If a break out happens, then we do have a successful inverse head-and-shoulder. Otherwise, we may see the index moving sideways to downward for the coming week. I am more inclined to think that this will be a sideways to downward movement for the earlier reason that there was a large volume on the black candle of last trading day. But even though the inverse head-and-shoulder does not push through, the index may be forming an ascending triangle formation if the resistance holds, which is what I think would most likely to occur.

MPI (Chart: Daily Resistance: 4.44/4.20 Support: 3.76/3.43)

MPI seems to have broken out of an inverse head-and-shoulder formation. The breakout day had a very large volume and long spread. Target price for the formation is at 4.20. Resistance is at 4.44 which is the previous high. Support is at 3.76 which is near the neckline of the inverse head and shoulder.

MER (Chart: Daily Resistance: 236 /250 Support: 212/200)

MER looks as if it has broken out of an inverse head-and-shoulder formation, but technically, connecting the neckline does not show a breakout from the neckline. The breakout is more of a break out from a triangle. The good thing about the breakout is that it was not just a breakout from a triangle, it was also a breakout of the channel that existed since early 2010. The first time the channel was broken was last Sep 2010, but the stock went back inside the channel by Nov. This recent activity of once again breaking above the channel puts the stock in a bullish position once again. The target price for the breakout of the triangle is near 250, but upcoming resistance is at 236, which is the previous high. A little bit of caution though as the successive gap up for the past 3 trading days might result into exhaustion, just be on the look out for a reversal indicators (island reversal or hammer formation) near the resistance of 236.

StockWatch (Dec 13-17, 2010): PSEi

PSEi (Chart: Daily Resistance: 4235 Support: 4049/3953)

The index encountered resistance upon reaching the previous high of 4221 and have started to move south again. As of current, the 65 day MA is supporting the index, but if this does not hold, the next support would be at 4049, then at 3953 which is the previous low. One thing to observe for the coming week is the possibility of an inverted head-and-shoulder formation if the support at 4049 holds and the index started moving north again. The neck line of the formation is at 4235, a break above that with large value turnover may propel the index to new high at 4500.

StockWatch (Dec 06-10, 2010): PSEi

PSEi (Chart: Daily Resistance: 4194/4221 Support: 3953)

The index has bounced from the lows of the RSI 30. Trading last Thursday created a white candle that broke both the immediate resistance line and the resistance line from the start of the downward movement. It also broke through the 65 day MA as well. This is a positive thing for the index as it was able to break through 3 resistance levels. However, there was no follow through with the trading action last Friday. It would have been great if the trading last Friday was again a white candle with considerable spread, but instead the index opened and closed on almost the same level. This indicates a deadlock between bullish and bearish traders. So for next week it is still a wait-and-see who would win and break the impasse.

Considering the Elliott wave counting, I am hoping that this recent break of the 3 resistance levels would be the end of the C wave. But I am also not sure whether the C wave was completed in the first place, because text book length of C wave is at least the same size as wave A, so I was expecting the C wave to go further down toward 3850 level, which did not happen