PSEi (Chart:
Daily Resistance: 5330 Support: 5180/4860)
Just as we are
getting the hang of the ranging movement of the index, the index made an
unexpected move last week, where instead of following the ranging movement that
it has been doing, it broke above the channel area pattern.
As of Thursday
and Friday last week, the index has created a new resistance level, almost
reaching the previous high created last May.
So what is the
index now up to? Couples of area
patterns are fitting the current conditions of the index. The very evident is a
possible big and wide ranging movement.
Second that I could see is a possible cup and handle formation, a
bullish continuation pattern, considering the previous trend is upward. The
third is a possible double top formation if the index is unable to go beyond
the previous high.
All of the
possible area patterns that can be matched for the index’s current situation
have something in common, that is, its next movement would be a downward
movement. So expect further downward movement next week. Succeeding downward movement will eliminate
one by one the 3 patterns that matched the current conditions.
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