StockWatch (Jun 27- Jul 1, 2011): PSEi, CEB

PSEi (Chart: Daily Resistance: 4290/4340 Support: 4217/4130)

The index moved higher for the trading last week and it was able to recoup more than half of the downward movement for the past 2 weeks. It was quite strong considering that we only had 4 days of trading last week.

This recent action was the least that I was expecting. I was expecting either a continuation of the sideways movement or downward movement considering that the index has breached the support line of the channel or neckline of the triple top formation, but looks like the 65 day Moving average is providing strong support for the index preventing it from moving further downward.

As of current the index is just below a resistance line (connecting the troughs from Feb 9-Mar 25, 2010 with the peaks of Feb 18 & Mar 10, 2011). The next resistance after that is the standing resistance line for the triple top which is around 4340.

I’m not so sure how the index would move next week, but in a general sense, we are still on a sideways movement, trading between 4340 and 4130, a much wider channel than before.

The current state of the index could either spur an ascending triangle, an inverse head-and-shoulder, or just a simple sideways channel. So it’s anybody’s guess, which means, with either of the possible formations, we could still be in for longer sideways movement.

For the coming week, range trading is recommended since we might be in for longer sideways movement, but definitely keep your positions at the minimum.

CEB (Chart: Daily Resistance: 96.55/ 100 Support: 82.80/90)

Looks like there is a window of opportunity for CEB, as of last Friday’s trading, the stock may have formed and broken out of a flag formation.

Measuring the height of the pole ( run up from June 15-17), the probable target price for this break out formation is near 100.

The stock could still go beyond 100 if we would consider the small inverse head-and-shoulder formation that may also breakout, in line with the breakout of flag formation.

In a general outlook, this stock seems to be promising even for the long term as we can see that it is now able to create higher lows, considering the successive downward movement that it made from the start of its IPO trading up to Feb 2011. We might be seeing the formation of the 3rd count of the Elliot wave.

StockWatch (May 9-13, 2011): PSEi, CEB

PSEi (Chart: Daily Resistance: 4340 Support: 4170/4150)

Looks like the bears won on the standing sideways movement of the index. The sell down brought the index lower by around 100 points.

Although the sell down made a considerable effect on the index, there seems to be a light on this gloomy scenario. Trading last Friday saw the index creating a hammer formation. This means there was a considerable pull back effort made by the bulls preventing the index from slipping lower. Also considering the channel created during the sideways movement of the index, the sell down last week broke the support line of the channel but the target level of the break down was already reached last Friday. In addition to this, coming from an RSI of above 70, support is usually found when RSI reaches 50. All of these signs are pointing to a possible pull back by next week. The question of whether this pull back would be a continuation of the upward trend is still unknown, but at the very least, if you got stuck with your position, there is a chance for you to sell by next week.

CEB Chart: Daily Resistance: 94.50/100/105 Support: 89.10)

CEB had a bullish run last week creating large spread on the white candles accompanied by increasing volume. This is definitely a unique showcase of strength considering that the market in general was down most of the days last week.

As of current, the stock is exhibiting signs of a pennant formation and a break out that happened last Friday. This break out has a target price of around 105. However, there is a strong resistance at 100.

Watch out for signs of divergence as the stock goes up.

StockWatch (Jan 24-28, 2011): PSEi, CEB

PSEi (Chart: Daily Resistance: 4040/4065 Support: 3940/3880)

PSEi action for last week was very much unexpected. After a prior week of large value turnover, I was expecting for the index to push further up until the resistance line of the sideways channel. However, the 65 day MA proved to be a strong resistance and pushed the index down for the week even breaking the existing sideways channel and creating new low. The index is currently supported by the 130 day MA and looking at the RSI being oversold, I think this will probably provide support for the mean time and push the index back up to the resistance line of the downward channel. In the short term we are moving downwards, but in the long term, we are still moving sideways up until we break below the support line near 3840 (the support line that connects the low of Feb and May 2010). So for the coming week, it would be a chance to sell for the mean time if the index bounces from support for all those who were stuck during the downward movement.

CEB (Chart: Daily Resistance: 102 Support: 86)

CEB would definitely benefit from the market’s bounce next week if the index’s 130 day MA holds. CEB has been very much oversold with the RSI falling below 30 level. In addition to that, recent action on this stock saw an increase in volume for the last 3 trading days, with Wed marking strength with the hammer formation, supported by succeeding buying action on Thursday and Friday. So expect that this stock will still move upward next week. However, the upward movement might not go that far because there is an upcoming resistance near 102. If the resistance is broken, expect possible upward movement up to the next resistance at around 115.