StockWatch (Oct 26-30, 2009): PSEi, BPI, SM

PSEi (Chart: Daily Resistance: Resistance: 3000/3092-3149 Support: 2915/2884)

The index bounced back from 2 consecutive days of selling. RSI did bounce from the 50 level, which means.the market is still generally bullish. Expect the continuation of the upward move next week, but do watch out for upcoming logical resistance at 3000, which I think by next week would be broken, and the standing resistance line from March at the range of 3092 to 3149. The standing resistance from March 2009 is still blocking the index’s upward progress, but I believe that this will be eventually broken by Nov and will become support by then.

BPI (Chart: Daily Resistance: 48.50 Support: 45.50)

BPI actually had a breakout at 47.50 from an ascending triangle forming from May 2009. The breakout was supported by large volume, the only problem was that it could not get past the standing resistance at 48.50. The day after the breakout, the stock went higher, but closed on the same level as the opening for that day, which indicates that there is still a lot of bearish sentiment for this stock. Then eventually the stock made a return move and price fell below the breakout line. This further confirms the weakness of the stock. Trading last Friday moved the stock above the resistance line again, but this time there was smaller volume, which indicates the upward movement is not that strong.

BPI actually has a large upward potential, you can either consider a large inverse head-and-shoulder formation or an ascending triangle formation, either way it give a great upward potential. The only problem is with the recent activity that I have explained above, it seems that it is not yet time for this stock to soar. But do watch out for this stock, especially if it breaks above the resistance line of 48.50. I believe that this could happen probably within Nov to Dec time frame.

SM (Chart: Daily Resistance:325 Support:290)

SM seems to have formed an island reversal. The stock had a sell down on Tuesday with large volume, followed by a large downward spread the next day with relatively lower volume. By Thursday, the stock gapped down and went into an indecision mode, with the stock opening and closing on the same level. This was accompanied with a very large volume. Considering the previous 2 selling days of trading, the indecision was rather a welcome sight to have. Although this may indicate indecision, this also indicates support. On the following day, Friday, the stock again gapped up with relatively large volume, which further confirms the support the previous day.

Looking at the RSI, the stock is currently oversold, and there is still a large area for upward movement. However, the MACD, suggests that this stock is bearish as it is opening downwards and below the centerline as well. So trading strategy for this stock is just to take advantage of the low RSI level and get out at the first sign of weakness. Watch out when RSI reaches near 50 level, usually when the RSI is coming from the low of RSI 30, RSI 50 is regarded as an area of resistance or rather an indicator that stock is overbought.

StockWatch (Dec 08-12, 2008): PSEi, SM

PSEi (Chart :Daily Resistance: 1986 Support: 1830)

Again the resistance line has proven itself to be a strong resistance line. The index was unable to move past the resistance line, and moved lower last week. Volume was very small last week. What is clear right now is that the index in moving within a symmetrical triangle. For the coming week, the support line of the symmetrical triangle will be tested.

Still there is no clear reversal pattern in the chart except for an island reversal on the previous short term upward trend. Watchout for the centerline as MACD approaches it, usually it is an area of resistance.

General Note: A lot of other stocks are similarly forming a symmetrical triangle. It is still too early for a break out or a break down, but do watchout for the progress of the symmetrical triangles.


SM(Chart: Daily Resistance: 183 Support:167)

SM is showing signs of a descending triangle. Trading last Thursday and Friday already breached the support line at 67. Things are not looking good for this stock as the sell down last week was accompanied by significant volume. For the coming week, further breach to the support line may happen.

In Retrospect: IPVG, SM, DGTL

IPVG

Support at 6.40 held only up to Wednesday’s trading and went down to 6.30. But on the last trading day, price went back up. As of current, the ascending triangle is still intact. We still have the coming week to see if the dip to 6.30 was just temporary or if resistance at 7.10 will be broken this week. Recommendation: Hold. If price proceeds to move up, watch the volume at 7.10. Breakout volume should be more than 10M shares traded.

SM

SM broke down from the support line and went as low as 347.50, below the 65 day MA. Recommendation: Buy only on breakout. Although the ascending triangle is still intact, there is still a possibility that price would just move in a range between 347 and 375.

DGTL

DGTL broke out without volume. Price action did not even reach 1.90 as the 65 day MA already blocked its move up. Recommendation: Sell. There is a higher possibility of price to still move downwards.

StockWatch (April 16-20, 2007): IPVG, SM, DGTL

IPVG(Chart: Daily Resistance: 7.10 Support: 6.40)

IPVG seems to be forming an ascending triangle with resistance at 7.10. Target price for this ascending triangle is 9.10. Recommendation: Watch out if price continues to move down. Buy if the support at 6.40 holds.

SM (Chart: Daily Resistance: 375 Support: 360)

SM is forming an ascending triangle with TP at 425. Recommendation: Buy only on breakout at 380, cut loss at 370.

DGTL (Chart: Daily Resistance: 1.76 Support: 1.70)

DGTL is forming an ascending triangle with resistance at 1.76. Target price is 1.96. If it breaks out, it needs to take out the 65 day MA and the gap down at 1.90. Recommendation: Buy on breakout. Watch out for resistance at 1.90 if it breaks out without volume.