StockWatch (Nov 1-5, 2010): PSEi, LCB, CPM

PSEi (Chart: Daily Resistance: 4299 Support: 4250)

The index moved downward to sideways last week. The MACD is still bearish and RSI is still overbought, there is still no good indication in the chart so expect further downward to sideways movement for the index next week

LCB (Chart: Daily Resistance: 0.42 /0.75 Support: 0.36)

LC B is about to reach a support level at 0.36, the upper level of the gap up that happened last September and at the same time the 65 day MA level. The index has been moving downwards since Sep and it is now near oversold level. A bounce will definitely happen for this stock, so be on the look out for reversal formations.

CPM (Chart: Daily Resistance: 2.55 Support: 2.06)

CPM is very much oversold with the RSI reaching below 30. This stock is definitely queued for a bounce from the low. As of current, there is a hammer formation last Oct 28 and trading last Oct 29 saw a black candle that is higher than that of the previous day. Come Monday if the stock opens higher, this is the confirmation of the reversal and a time to buy for the short term hold. Watchout for upcoming resistance at 2.52 which is the 65 day MA

PSEi (Chart: Daily Resistance: 2920 Support: 2826)

The downward target value for the double top formation of the index has nearly been reached with the lowest being registered last Friday at 2826. The index had a short rally only to be stopped by the 130 day MA. For those who were able to scoop up some stocks last Wed and Thurs but was caught off guard by the dip that occurred last Friday, I would advise them to hold on to their stocks for a while because I believe last Friday’s trading brings good news to those who were surprised by the turn of events.

Last Friday’s trading opened lower, dipped further in the middle of trading but was able to recoup from the big dip. This I believe is a sign of strength, this means bullish traders were able to counter the effects of the bearish traders by regaining the dip and closing near the opening value. This, together with the relatively large volume last Friday and the RSI oversold condition of the index will prop the index back to re-test the 130 day MA and possibly re-test the support-turned-resistance level at 2979 by next week.

The possible rally next week I believe will not last beyond the 2979 level or the 65 day MA level, so don’t go long on your positions. For those who were stuck due to Friday’s dip, this will be a good chance to sell.

General Note: There are a couple of stocks that are very much oversold (RSI below 30) like TEL and AC. These maybe opportunities for a quick and small profit, just don’t go long yet on the stocks.



CPM (Chart: Daily Resistance: 4.55/5.00 Support: 3.20)

CPM does not have any area pattern formation but last Friday, the stock had a white candle with relatively large volume. That incident, coupled with a very oversold RSI level of 15 will probably boost the stock upward next week. You can buy at the current level and wait for the stock to reach 4.50 to 5.00 before selling. Watchout for the volume, if the upward movement next week is not much supported by larger volumes, better sell your position even with just a small profit.

BPI (Chart : Daily Resistance: 45.50/47.50 Support: 43.50)

BPI doesn’t have any area pattern breakout, my attention was just caught by the very large volume on the white candle formation last Friday. If the volume is real (not just due to some cross transactions), then this is a very good sign for the stock. Any stock on a downward motion will continue to move lower and only a bullish action (in this case a white candle) with large volume can counter the movement, which for BPI’s case happened last Friday. So for next week there is a higher possibility for the stock to continue moving upwards, possibly testing the support-turned-resistance at 47.50. Upcoming resistance is at 45.50, which is the resistance for the sideward channel area pattern, if this level is broken with large volume, we can expect the stock to reach 47.50