In Retrospect: TA, SMCB, GEO, PX, MEG

TA

Target price for TA is reached and has gone beyond up to 2.30 establishing a new high. There is profit taking as of the moment, but price may still move up once profit taking is over. Profit taking may push the price down to 1.80 level, the 38.2% fib retracement.

SMCB

SMCB moved lower and formed a double bottom at 59.50. It invalidated the earlier triangle that I saw. It seems now that 59.50 is a strong support now. Resistance is still at 66 and the bullish divergence is still intact. The double bottom I think is another confirmation that the downward trend is reversing. We have to look at the upcoming resistance at 66, if it is a strong resistance and produces a lower high for the price and a higher high for the MACD and RSI, this is another confirmation of the trend reversal.

GEO

GEO was one of the stocks that was definitely affected by the Glorietta 2 blast creating a gap down on the first trading day after the blast. It has now covered the gap made. This rally would be a good time to sell as there is still no clear bullish indication to contradict the bearish divergence that was seen last week. Price may still move to as high as 2.90 or beyond, however watch for MACD and RSI forming a lower high.

PX

PX formed a higher high for the price, but the RSI and MACD has yet to register a higher high. RSI’s bearish divergence is still intact and now we watch for the MACD if it would follow to exhibit a bearish divergence.

MEG

Bearish divergence on the RSI is still intact. It’s still a wait and see if other indicators will confirm the bearish divergence.

StockWatch (Oct 22-26, 2007): PSEi, TA, SMCB, GEO, PX, MEG

PSEi (Chart: Daily Resistance: 3835/3863/3896 Support: 3750/3600)

Cautious trading may prevail next week as a reaction to the Glorietta 2 bombing. I think that those spooked by the tragic terroristic act will sell immediately on Monday. However, even if the bombing did not happen, our market is really on its way down for the short term. As seen in the chart, after breaking the previous high, the index was not able to sustain its position above the support line. It eventually moved below the support line and even lower. As of current, the MACD has crossed below the signal line, triggering a sell for the short term. A good picture though that is currently forming in the chart is a falling wedge. Given the recent bullishness from the index’s lowest last August, to its highest this October, it is highly likely that current downward move we are experiencing is a prelude to the formation of the falling wedge. A falling wedge indicates short term bearishness and once it breaks above the resistance line, further bullish sentiment is expected. The target level of the falling wedge is around 3900.

TA (Chart: Daily Resistance: 1.52 Support:1.34 )

TA gapped up on Friday with a large volume. Conservative target price of the breakout is at 1.80.

SMCB( Chart: Daily Resistance: 66 Support: 61)

SMCB is exhibiting a bullish divergence. Both MACD and RSI registered a higher high, but the price registered lower highs. Also, it seems that it is forming a symmetrical triangle as of current with 61 as support and 66 as resistance/break out level. The target price for the symmetrical triangle is at 74. This stock may encounter further resistance from the 3 MA’s at the levels of 69-72.

GEO(Chart: Daily Resistance: 2.90 Support: 2.48)

GEO is exhibiting signs of bearish divergence. Both RSI and MACD registered a lower high, but the price still registered a higher high. Sell.

PX (Chart:Daily Resistance: 9.70 Support: 9.50/8.90)

PX is also exhibiting bearish divergence of RSI against price. Price formed a higher high, but RSI formed lower high. Sell.

MEG (Chart: Daily Resistance: 4.60 Support: 4.25/3.85)

MEG will probably exhibit a bearish divergence between RSI and Price. As of current, the peak of the RSI is not yet formed, but considering the price has already gone higher, RSI still has not registered a higher high. We are just waiting for confirmation of the RSI peak forming a lower high. It would be best to sell on rally.