StockWatch (Mar 28 – Apr 01, 2011): PSEi, MPI, MER

PSEi ( Chart: Daily Resistance: 3920/3950 Support:3850/3700)

The index generally moved sideways last week with a slight upward movement showing a lot of indecisiveness as evidenced by the cross and short body of the candle stick. However trading last Friday was a little bit different from the previous trading days last week, as a considerable spread was made in the index accompanied with average value turnover.

For next week, expect the index to still continue with its sideways movement with a slight upward bias. Upcoming resistance is at 3920 which is also the level of the 65 day moving average. If trading by Monday is still accompanied by low value turnover, the resistance at 3920 would definitely pose a serious resistance to the upward movement of the index.

MPI (Chart: Daily Resistance: 3.35/3.40/3.45/3.60 Support: 3.11)

Trading for MPI last Friday saw a big spread in the body of the white candle accompanied by a large volume (56 million trades). This is definitely a reversal indicator for this stock.

Watch out for the following upcoming resistance areas; 3.35 which is the 260 day moving average; 3.45 which is the resistance established from Jan 2011; 3.60 which is the previous high and also the 130 day moving average.

With the large spread and large volume, this stock is definitely a buy, but it would only yield a small profit on the short term assuming the immediate resistance (3.35) holds its ground.

What we wanted to see is a follow through of the trading last Friday, with this stock moving higher in price, accompanied with increasing volume to confirm the upward momentum. If that materializes, we can expect the price to reach as high as 3.60 making a good amount of profit. However, if there is no follow through for this stock, where the stock moves higher with very low volume, OR, if sell down accompanied with large volume (20 million trades or greater) is observed when price reaches the resistance areas, then be prepared to sell your position.

MER (Chart: Daily Resistance: 250/260/270 Support: 240/230)

MER seems to have broken out of a sideways channel. Target price for this stock is near 260. This is a very enticing buy considering the large spread and volume, however, at the current price, there is little room for profit for this stock.

Also, the stock is already near overbought level on the RSI, so expect this stock to make a return move towards 240 and 230 towards the end of this week.

Upcoming resistance areas also pose a problem for this stock. The three very visible large red candles formed last Jan 2011 would definitely act as strong resistance areas for this stock.

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StockWatch (Jan 03-07, 2011); PSEi, MPI, MER

PSEi (Chart: Daily Resistance: 4235/4239 Support: 4174/ 4040 )

First of all Happy New Year to all of you!

The index, from the first look, seems as if it is forming an inverse head-and-shoulder formation, which is something that I was hoping for last year, but from the last trading day of 2010, it somehow does not support this case. Last trading day for 2010 saw the index form a black candle with relatively large volume, which is not a good sign. The large volume on the last trading day would have complemented the inverse head-and-shoulder formation if it was a white candle. A black candle means there is doubt on whether the upward movement can still be sustained. Although still do watch out for the neckline near the level of 4235. If a break out happens, then we do have a successful inverse head-and-shoulder. Otherwise, we may see the index moving sideways to downward for the coming week. I am more inclined to think that this will be a sideways to downward movement for the earlier reason that there was a large volume on the black candle of last trading day. But even though the inverse head-and-shoulder does not push through, the index may be forming an ascending triangle formation if the resistance holds, which is what I think would most likely to occur.

MPI (Chart: Daily Resistance: 4.44/4.20 Support: 3.76/3.43)

MPI seems to have broken out of an inverse head-and-shoulder formation. The breakout day had a very large volume and long spread. Target price for the formation is at 4.20. Resistance is at 4.44 which is the previous high. Support is at 3.76 which is near the neckline of the inverse head and shoulder.

MER (Chart: Daily Resistance: 236 /250 Support: 212/200)

MER looks as if it has broken out of an inverse head-and-shoulder formation, but technically, connecting the neckline does not show a breakout from the neckline. The breakout is more of a break out from a triangle. The good thing about the breakout is that it was not just a breakout from a triangle, it was also a breakout of the channel that existed since early 2010. The first time the channel was broken was last Sep 2010, but the stock went back inside the channel by Nov. This recent activity of once again breaking above the channel puts the stock in a bullish position once again. The target price for the breakout of the triangle is near 250, but upcoming resistance is at 236, which is the previous high. A little bit of caution though as the successive gap up for the past 3 trading days might result into exhaustion, just be on the look out for a reversal indicators (island reversal or hammer formation) near the resistance of 236.

StockWatch (Oct 25-29, 2010): PSEi, APO, SLI, MER

PSEi-Weekly Chart

PSEi (Chart: Daily Resistance: 4330/4350 Support: 4161)

Last week the index moved lower, but was able to recoup losses on the last 2 days of trading and was even able to break above the sideways movement (line A-B) for the past 3 weeks. The breakout that happened last Friday on the sideways channel gives a possibility of the index moving higher towards 4350. The question though is whether there will be enough momentum to propel the index beyond successive resistance areas. One of the upcoming resistances is at 4330, if this proves to be a strong resistance the index might move in a ranging movement within a slightly upward leaning channel (line C-D).

Looking at the weekly chart, though the bearish confirmation for the hanging man candle stick formation did not appear, there is another hanging man that formed for last week so it’s a wait and see what will happen for the coming week whether the index would still move upward or whether another hanging man would appear. But as long as the hanging man formation appears, this means caution in trading.

APO (Chart: Daily Resistance: 2.45 Support: 2.15)

APO has broken above the upward channel with very large volume. The only problem is that the target price at 2.45 is already near the closing price last Friday. Also the stock is very much overbought, so a correction will happen anytime soon. It would be best to wait for the stock to correct first before buying. Buy near the support at 2.15

SLI (Chart: Daily Resistance: 2.35/2.50 Support: 2.00)

SLI’s unusually large volume last Friday caught my attention. Even if there is no formation broken, the large volume I believe is enough for the stock to move higher. This stock is good for a short term hold up to the previous high of 2.50. Things may start to move the other direction once it gets near the RSI of 70. Look out for a possible head and shoulder formation if the stock moves downward when it reaches near 2.35.

MER (Chart: Daily Resistance: 236 Support: 206)

MER had 2 long white candles formed Thurs and Fri last week. Volume is relatively larger than the volume during the downward movement so this is a candidate for buying. Observe the volume as the stock moves higher, if the volume is increasing together with the price this means momentum is intact, but if the volume is diminishing as the stock moves higher, upcoming resistance at 236 might prove a strong resistance.

StockWatch (June 7-11, 2010): PSEi, MER, DGTL

PSEi (Chart : Daily Resistance: 3367 Support: 3195/3106)

The index had a good run up last week. However, there is still the resistance from June 2008 which is affecting the upward movement of the index. As of current, there is a battle between bulls and bears, as the trading last Friday ended with a stalemate. But based on the RSI and the Stochastics, there is a higher possibility that the bears will win in the coming week, so it is best to lighten your load.

MER (Chart: Daily Resistance: 197 Support: 160)

MER has exhibited large volume lately, with the last trading day plotting the highest volume since December last year. Looking at the chart, there is a horizontal channel which is acting as a resistance lately. For the next week, expect the stock to move lower as the RSI is now overbought.

DGTL (Chart: Daily Resistance: 1.65 Support: 1.46)

DGTL broke out of a sideways channel with a gap. Target price is near 1.65.
Be cautious of buying at this point as target price is near and there is a higher possibility of the stock to move lower towards the end of this week as the RSI is very much overbought.

StockWatch (Mar 02-07, 2009): PSEi, MER

PSEi (Chart: Daily Resistance: 1900 Support: 1818)

Last week was a lazy week for the index. Again, nothing much happened except for the large volume last Monday, but that volume did not translate to any large movement. The index is still moving sideways hovering just below the 65 day MA. It’s getting harder to gauge what will happen next if the index continues its sideways movement this week. We are currently in index limbo now, RSI is neither overbought nor oversold and MACD is also not giving clear picture of where we are heading. Stochastics is the only indicator that I am using that is atleast suggesting that it would either be a sideways to downward movement for this week. The only good sign I am seeing from the chart is that the MACD is consolidating near the center line and the index is maintaining its position near the 65 day MA. But I am optimistic that something will happen soon, this sideways movement will not last long, so better be prepared to react fast.


MER (Chart: Daily Resistance: 92 Support: 7.50)

MER is definitely one stock to avoid for now. It is very clear from the chart that its attempt to move higher is not supported by the volume which is a sign of weakness. If the stock is able to create a higher high by next week, check the following: 1.) MACD and RSI -The creation of a higher high should also translate to a new higher high in MACD and the RSI, if not, then we have a bearish divergence. 2.) Volume- The attempt at a higher high should be accompanied with volume, otherwise, the stock will have a hard time moving upward any further.

StockWatch (Feb 16-20, 2009): PSEi, MER,WEB, AP, BPC

PSEi (Chart : Daily Resistance: 1970/2004 Support: 1866/1818)

Nothing much happened with the index last week. The index moved sideways, and this time, its seems that the 65 day MA is providing support. Volume last week was unusually large, but the action last week doesn’t give much of a clue as to where the index would move next week. In the US, Barack’s stimulus plan just got passed in the congress, and I’m not sure how the local market would react with this news. But based only from the stochastics, the index would probably move sideways or down next week.


MER (Chart: Daily Resistance: 85.50 Support: 71)

MER had a very surprising 2 week rally at a time when most of the stocks are taking a beating. From the chart we could see this rally contributed to the breakout from an upward moving channel. But not all good things lasts, and the formation of a black candle last Friday is probably an indicator that a correction to this 2 week rally is coming. Next week expect the stock to correct and re-test support at 71.

WEB (Chart: Daily Resistance: 0.037 Support: 0.033)

WEB seems to have broken out of a pennant formation. Target price is nearly reached and RSI is very much overbought, so expect a correction by next week. Price is now above the 260 day MA, which is a very welcome sight. However, the RSI and stochastics are pointing to a correction by next week.

AP (Chart :Daily Resistance: 4.75/5.00 Support: 4.10)

AP had a breakout from what seems like an ascending triangle or probably a symmetrical triangle. Target price is at 5.00, but it seems like a correction is about to happen next week with the RSI very much overbought. Watchout if this breakout transforms into a flag or pennant formation. Also watchout for the volume during the correction. If there is little volume on the correction phase, this is a good sign that a lot are still holding on to this stock and that the continuation of the rally may happen after the correction.

BPC (Chart: Daily Resistance: 1.32/1.70 Support: 0.95/1.08)

BPC also had a breakout of a vey small and slim symmetrical triangle. Target price is at 1.32 which very near the breakout level. It is not advisable to get this stock as of the moment, since the target price is very near and RSI is on overbought level. Watchout if the stock is able to maintain its position above 130 day MA. This would be a very good sign of strength if it is able to maintain a position above the 130 day MA.