PSEi (Chart: Daily Resistance: 4218 Support: 4003)
The index moved upward on the start of the trading day last week. It was a welcomed surprise, but unfortunately, value turnover on that day was relatively lower. For the remainder of the week, the index moved sideways, treading the line of resistance connecting the peaks from Aug.
Of the 3 scenarios that I was looking out for last week, I think scenario 3 would best fit what happened last week, where the current bullishness in the market is labeled as wave 3 count. The projected end point of wave 3 was supposedly near 4260 and that was just barely reached last Monday when it peaked at 4218. So if we consider this recent bullishness as wave 3, then wave 4 would bring our index down to near 4003, but not going any further below.
Looking at the weekly chart, as wave 4 materializes, we are getting closer to seeing a possible head and shoulder formation. But this is probably 1-2 months down the road before it peaks. This is something to observe as the formation progresses.
For next week, it is still recommended to stay on the sidelines. If one would try to ride wave 5, then you could probably look for opportunities when the index nears the 4003 level.
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