In Retrospect: GEO

GEO

GEO price movement fell back inside the small ascending triangle but was able to move above the resistance of 1.64 on the succeeding days. This move back in the triangle has somehow tainted the formation’s bullish expectations. The price currently stopped near 38.2% Fibonacci retracement. The volume is increasing on the past trading days, but the price movement still has the 130day MA approaching as resistance. If the volume continues to increase on the coming week, there maybe a chance that the target price may be reached.

StockWatch (Sept 10-14, 2007): PSEi, Mining, GEO

PSEi (Chart: Daily Resistance: 3380 Support: 3260)

Last week at the Absolute Traders CAF session, Chairman Fitz Aclan also noticed the inverted H&S forming in the index. With the first 2 trading days down movement of the market I was already thinking if this is the start of the right shoulder’s formation. In my analysis from the gaps formed, I was expecting that the right shoulder should start its formation when it reaches near 3460 level. It is only now when I saw the index’s chart that I came to verify that the recent activity in the market was just a sideways movement. So this definitely is not yet the right shoulder’s start of formation. This is now the critical part of the movement, the recent week’s sideways movement can mean any thing. If traders are still bullish on the market, the sideways movement is just a healthy pause for a further upward move. If traders have started to get bearish once again, the sideways move may be an exhaustion of the buying activity and we may see the index move down. Things to watch out for this week is the 130 day MA acting as resistance at 3380 and the gap formed between 3210 and 3260. A move above the resistance line means there is a good chance for price to move up to the 35 day MA at 3500 for now. A move to close the gap means were in for another bearish ride

Mining Index (Chart: Daily Resistance: 6270 Support: 6030/5900)

The mining index caught my attention because of the gap, the great spread and high volume last Friday. This led me to look thoroughly at this index as to what area pattern it broke out from. But, as I tried to turn the image upside down, flip it left to right, I was not able to see any area pattern from where it broke out. But on further analysis of the gaps formed, rather than being a bullish indicator, the gap with big spread and high volume was rather a bearish warning. Index has already formed a break away gap, runaway gap and now, the recent gap formed was the exhaustion gap. Considering the runaway gap as a halfway point to the top, coupled with the exhaustion gap, this means the current index level is already near the top. The current index level is also being blocked by the 35 day MA. Things to look out for this week are the resistance level of 6270 which is also the 35 day MA, support level at 6030 which is the 130 day MA and the RSI reaching the oversold level. The gap, big spread and high volume may still attract buyers, and possibly contribute to a short upward move before moving sideways

GEO (Chart: Daily Resistance: 2.00/2.04 Support: 1.64/1.52)

GEO seems to have formed a small ascending triangle and broke above resistance at 1.64. The target price for the small triangle is 2.20. Along its way up it may encounter resistance at 2.0 the psychological resistance and 2.04 the 10day Simple Moving Average. Best price to get in on this stock is below 1.76. Cutloss is at 1.62. Recommended selling price is at 2.18. The breakout volume is good; however this may still be affected by general market sentiment and also in particular the mining index, so keep watch of the movement this week.

In Retrospect: CMT, PAX, WIN

CMT

CMT move down to as low as 1.10 this week breaching the long term resistance line for the second time. Trading last Friday brought the price back above the resistance line. Price may move sideways to down next week. This is now a crucial part of the stock: if price is able to hold above the support line, this means there is strength in this stock. Otherwise, price may move to the next support levels 1.08 and 0.99.

PAX

PAX moved sideways this week. Fortunately the island reversal still holds, as the gap was not filled up, this means there is still strength in this stock. However, the price level at 15.25 which is also the resistance line connecting the peaks from year 2000 to 2006. This is a classic close quarter battle between the bulls and bears. The bulls are trying to hold the gap while the bears are preventing the price to move above the resistance line. For the coming week, price may move sideways. If the gap is closed, then this is definitely a sign of weakness of the stock.

WIN

WIN went to as low as 0.31 respecting the support line of the triangle for the 3rd time. This is a good sign for this stock. This could be the next Piso stock if we try to plot the target price of the triangle. However, as I have said before, it is still too early in its formation and anything can still happen. For range trading, getting in at 0.33 would still give a good profit considering a target price of 0.44 (65 day MA)

Recomended: AT's CAF: PSEi into the last quarter: Up, Down or Sideways?

Absolute Traders will be having its monthly CAF (Chart Analysis Forum) "AT's CAF: PSEi into the last quarter: Up, Down or Sideways?" this Tuesday, Sept 4, 2007 at Rack's El Pueblo. I was able to attend most of the CAFs before and I have to say that the CAFs gets better each month, thanks to the growing community of traders using technical analysis and ofcourse to the people behind Absolute Traders. It is in these forums that you get to improve on your technical analysis skills by listening to other people's analysis, learning their techniques and style, validating these with your own and someday be able to use them to create and refine your own techniques and analysis. This is definitely a recomended event.

StockWatch (Sept 3-7, 2007): PSEi, CMT, PAX, WIN

PSEi (Chart: Daily Resistance: 3390/3460/3500 Support: 3317/3260)

The index has now formed a possible exhaustion gap. This looks like an early warning sign for the index. RSI seems to be contradicting the gaps formed as RSI is still halfway from reaching the 70 mark of being overbought, however considering we are on a bear market, usually the 50 level is already considered an overbought level (as 50 is sometimes the oversold level for a very bullish market) . The Dow closed 100+ pts higher last Friday, the local market may follow on Monday. This means we may reach near 3460 level (the 61.8% Fibonacci retracement), within the coming week. There is also the 65 day MA to watch out. Interestingly, if the 61.8% Fibonacci retracement would prove to be a resistance, this may somehow pave the way for the creation of a head and shoulders formation. The left shoulder and the head are already formed (marked as number 1 and 2). We are still waiting for the right shoulder and right neckline to be formed. It’s an exciting wait-and-see for the coming weeks if indeed a right shoulder will be formed. Now try to close your eyes and imagine the right neckline forming near 3460. See it? =) Now try to draw the target price for the H&S formation! Whoaoooo!!!!! Target price is around 4075 level (also the 127.2% Fib extension). Come to think about it, there maybe some possible technical truth to what analysts are predicting of reaching the 4T level by end of the year. Now slap your face! Wake up! This is just a hallucination for the moment. My analysis might be incorrect as the left shoulder might be too short to be a valid shoulder and it is still too early, anything could still happen! Hehehehe! =)

CMT (Chart: Daily Resistance: 1.40/1.55 Support: 1.24/1.08)

CMT has been moving with large volume for the whole week. This definitely is a very bullish sign for this stock. There is currently no area pattern for this stock except for a sideways channel. Current resistance is at 1.40 and 1.55 which are 50% and 61.8% retracement levels. MACD is now above signal line which is a bullish sign and RSI is half way to being overbought. The trading last Friday displayed a large upper shadow on the candle which indicates that bears are starting to move in. It is possible that sideways to downward movement may happen this coming week.

PAX (Chart: Daily Resistance: 15/16/17.50 Support: 14/13.25)

PAX may have formed an island reversal. The breakaway gap was accompanied by large volume. What would be good to see is that everyday trading volume would also increase to indicate that there really is momentum in this stock. As of current the large gaps on the downward move may be a cause of concern for traders as this translates to resistance. The stock may move sideways to downward for the coming week. What to look out for the following weeks is the possible formation of a runaway gap.

WIN (Chart: Daily Resistance: 0.37 Support: 0.30)

WIN is currently forming a symmetrical triangle. As of current it is still in its early stage of formation. The current level is a good buy level considering it is near the support line and that the target price for range trading at 0.45 is large enough to support a 1:3 risk to reward ratio. However price may still move down to 0.30. If you are able to get in at 0.33, cutloss if it goes below 0.29