In Retrospect: EEI, CMT

EEI

EEI took a breather for this week and traded between 3.25 and 3.60. There was only 1 day when the stock was sold down and on the rest of the days, the stock was bought up. This just indicates that a lot are still bullish with this stock. With such a momentum moving upward, I am somehow expecting for stock to form a pennant or flag formation. The price action last Friday saw the stock move from 3.35 to a high of 3.60 which suggests a breakout from a flag formation. However, the volume in my opinion is just average, relative to the volume of the previous days which is not very much a good breakout volume. If the stock proceeds to move higher for next week without a good volume of above 5M shares traded, this means the stock may be nearing its exhaustion level. Watch out for the price level of 3.80 to 4.00, the stock may find it hard to move past that level if the volume is still thin on its upward moves.


CMT

CMT also took a breather for last week and traded between 0.91 and 1.02. The sideward movement is perfect for a flag formation. A breakout is still to be seen so watch out for this. A good break out volume would be around 10M shares traded

StockWatch (Feb 11-15, 2008): PSEi, EEI, CMT

PSEi (Chart: Daily Resistance: 3330 Support: 3190/3120)

The resistance line at 3330 held last week, preventing the advance of the index. Nothing much happening on the index, probable trading action for next week will still be sideways to downward movement. It may however trade within a small triangle bounded by the resistance line and the long standing support line from 2006. We are still in bearish territory for the MACD so trading strategy would still be keeping short positions.

EEI (Chart: Daily Resistance: 3.55 Support: 3.00/2.80 )

The long wait had paid off for EEI, the stock bounced from its low of 2.34 reaching a high of 3.55. The stock is very bullish that it consecutively closed higher for the whole week and accompanied by large volume. Looking at the chart, it has just recently broken a resistance line formed from its recent downward move. The resistance line was broken with volume, so this definitely suggests that this stock is now out of the downward move. However, last Friday’s trading is suggesting that the recent bullish move for this stock is now encountering some resistance. The stock definitely has the potential of moving towards near 4.50 level, but it needs to take a breather from the bullish move. So expect the stock to probably move sideways to downward, trading between 3.55 and 3.00. Watchout for the volume on the downward move, low volume on the downward move is good for this stock, but increased volume on the downward move means that a lot are starting to dump this stock. If you had this at the low of 2.34, it would be best to sell a portion of the stock and buy back near 3.00.

CMT (Chart: Daily Resistance: 1.02/1.12 Support: 0.84)

CMT had a bullish run last week, similar to EEI. It consecutively closed higher with volume and on the last trading day, it gapped up with large volume. An area pattern of a falling wedge seems to have formed and the stock has broken resistance at 0.86. This stock has an upside TP of 1.45. Resistance levels along the way up are the Fibonacci retracement levels of 1.02 (50%) and 1.12 (61.8%). Buying at 0.99 is still ok and with-in the 1:3 risk to reward ratio. However, RSI is indicating that this stock is near overbought so it is still possible for this stock to move downwards re-testing support at 0.84. Again watch out for downward movement with large volume as this may indicate that traders are now dumping the stock. MACD for this stock is still below the zero line, so trading strategy for this stock is to hold for the short term only.

In Retrospect: GLO, EDC, MBT

GLO

GLO gapped up on the first trading day last week with above average volume. However on the following day, the stock was sold down with almost the same volume as when it gapped up. On the succeeding trading days, the stock was sold down. This just implies that the stock is not yet out of consolidation. The good side of this stock technically is that the MACD is still above the zero line and above the signal line and the 3 MA’s are in its bullish order, so this stock is still bullish for now even if it is still consolidating. Another good thing about the stock is that it is still able to close above the resistance-turned-support line. The crucial part for next week is observing if the stock will still be able to close above the resistance-turned-support line at 1530. The not so good side of this stock is that it has been in consolidation for around 4 months. Next support levels are at 1520, 1495, 1475. If you intend to trade the range for this stock, a good buy will be near support at 1495-1475 and sell at around 1600, this will give you a good 5-7% net profit.

EDC

The resistance line at 6.30 was able to hold the advance of this stock, so this means the stock is not yet out of the downward move. It is possible that this stock is now starting to consolidate between 5.50 and 6.30.

MBT

No break-out from the falling wedge for this stock. The price movement just went sideways. The volume on the sell down on Jan 31 was just equaled with the volume on the gap up on the first trading day, but the succeeding trading days that followed had lesser volume. The bullish divergence was formed, but there are not enough other good indicators to back this up. Still, watch out for the downward TP of the H&S at 31.

StockWatch (Feb 04-08, 2008): PSEi, GLO, EDC, MBT

PSEi (Chart: Daily Resistance: 3330 Support: 3120)

The index encountered resistance at around 3100-3300 level, trading was characterized mostly with short bodied candles with long wickers. Currently, the index was able to reach the resistance line and closed just below it. Expect trading next week to move sideways to downward. Support currently is around 3120.

GLO (Chart: Daily Resistance: 1610/1675 Support: 1495/1465)

GLO had a breakout from the symmetrical triangle, however, the volume was not that sufficient to consider a good breakout. Watch out for upward moves with low volume, this indicates weakness of the upward move.

EDC (Chart: Daily Resistance: 6.30/6.70 Support: 6.10/5.70)

EDC gapped up last Friday with large volume, however, there was no area pattern involved in the gap up. Currently, it was able to move past the 260day MA with volume and looking at the weekly chart, the stock has been moving upward for the past two weeks with sufficient volume which suggests there is strength in its upward move. As of current 6.30 is a crucial resistance to observe, this is the resistance line formed during the stock’s downward move and at the same time the 50% Fib retracement level. If it is able to move past this resistance line with volume, then this suggests that the stock is now out of the recent downward movement. Also watch out for resistance the Fib retracement level 6.70 (61.8%).

MBT (Chart: Daily Resistance: 43/47 Support: 39.50)

MBT broke down from an H&S pattern with a downward TP of around 31. Currently, the stock is showing signs of bullish divergence; however, this is not yet confirmed as the trough for the RSI and MACD is not yet fully formed. Also a falling wedge is forming with a possible TP of around 55. If traders are bullish with this stock, the downward TP of the H&S may not be reached and it is possible for falling wedge breakout. For now just wait for the breakout from the falling wedge or the confirmation of the bullish divergence. Falling wedge breakout is at 44.

In Retrospect: EEI, TEL

EEI

EEI continued to move sideways for the past week. However there seems to be a small light of hope last Friday with the stock gaining around 3% and volume of around 4.8M shares traded. If the stock is able to gap up with more than 4M shares traded, this is a sign of strength for the stock and a formation of an island reversal.

TEL

TEL was able to significantly create another gap up on the second day of trading last week and as expected, resistance at 2900-3000 level was encountered. There will probably be profit taking for the coming week. If the support at 2905 holds for next week, then the stock might be good for another climb probably towards 3200 level.