We officially created a new high Wed last week, breaking the resistance of the previous high near 4560. Looks like this is the time to bring out the fireworks and celebrate a great start for this year.
Looking at the chart, the dreaded head and shoulder formation that we have been observing has now been invalidated by the creation of the new high for the index. The nearest area pattern that we could see is a large and wide sideways channel, which has the same range as the head and shoulder. With the breaking of the previous high, we could now see our index reaching as high as 5400 which is the target level of the big and wide sideways channel (that was formerly the head and shoulder formation).
However, as of current, we could see profit taking in the market for next week. That may be an opportune time to snatch some stocks and ride the early stages of the bullish sentiment that we now have in the market.
Who knows, this might be the early phase of our leap frog to become the 16th largest economies in the world by 2050 http://business.inquirer.net/39327/philippines-seen-among-top-20-economies-in-next-4-decades
MEG (Chart: Daily Resistance: 1.94 Support: 1.68)
MEG is one of the promising stocks that we have in the market. I say that it is promising because it currently looks like it is forming a symmetrical triangle. Aside from that, the stock has now formed a higher low last Dec 2011 which means it is now recovering from the downward trend that it suffered since Nov 2010.
Measuring the potential upside for this stock, if bullishness enters this stock, we could have a potential upside of up to 2.50 which is a 28% profit from the current price if the current symmetrical triangle breaks out.
As of current, the current price for this stock is now near the resistance line formed since the start of its downward trend since Nov 2010. I don’t see this stock breaking out next week, rather I could see this probably breaking out in 2-3 weeks further. For those who would want to ride this stock, start looking for opportunities next week as the stock moves downward. As long as the stock creates a new higher low, this stock is still in good condition.
RLC (Chart: Daily Resistance: 13.60 Support: 12.08)
RLC is one of the stocks that has been moving bullishly last week. This stock had successive long white candles accompanied by large volume.
It is very evident from the chart that this stock has broken out of a symmetrical triangle with a target price near 14.75. Buying at the current price level of 13.52, will just give you a profit of around 7%. I would recommend waiting for the downward/return move to reach near 12.50 before acquiring this stock so as to maximize profit. I believe that it is bound to go down by next week because the RSI is very much way beyond the overbought level.
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