StockWatch (June 9-13, 2008): PSEi

PSEi (Chart: Daily Resistance: 2900 Support: 2712)

The index moved further downwards to the low of 2717. It is possible that support may be available at this level, since the previous low was at 2712. If this becomes a trough, it is interesting to note that the RSI and MACD is still creating higher lows. By the MACD alone, we could infer that there is accumulation going on at this stage as the MACD has lately been creating higher lows. The MACD is still consolidating near the zero line, but this might oscillate more before moving beyond the zero line. Since it seems that we are in a consolidation phase, trading strategy would be to trade the range. It is still too early for this stage, but do watch out for reversal patterns like double/triple bottoms, of inverse head and shoulders, it is during consolidation that these area patterns begins to form. As of current we can see a lot of candidates for double bottoms, but it is still too early and these area patterns might evolve into another pattern later on.

StockWatch (June 2-6, 2008): PSEi

PSEi (Chart: Daily Resistance: 2900 Support: 2760)

There was not much action in the index last week. The previous gap down was covered on the third day of trading last week and thus invalidating the gap. Looking at the volume last week, there was significant volume on the last day of trading. This may suggest a continuation of the buying action by the first day of trading this week. In my opinion, I think the index is now slowly moving into consolidation phase and may trade any where between 2700 to 3000 for the succeeding weeks. Also take note that the “ghost month” is approaching and this may add to the consolidation phase. May be it’s time to hibernate…. as they say, “sell in May and go away...” It’s now June, have you sold yours? Hehehe :)

StockWatch (May 26-30, 2008): PSEi, ALI

PSEi (Chart: Weekly)

PSEi (Chart: Daily Resistance: 2900 Support: 2760)

The index had a very good 2 week rally which ended last week. Currently the index is seen to have gapped down last Thursday, forming a possible island reversal of the recent rally. Some points to take note: A.) The index broke above the long term resistance line from December 2007. This I think is a positive move for the index, even though the index recently created a lower low, it is now above 2 resistance line, one from Feb 2008 and the other from Dec 2007. It’s one small step at a time towards the index’s recovery. B.) The MACD is now just a few points away from crossing the center line. But the bulls would still have to fight for the right to cross the center line, as it is common during bearish market that the MACD center line usually acts as a resistance. We can expect that there will be further MACD consolidation near the center line, before it moves above. C.) Just like the center line of the MACD chart, the 50 RSI level usually acts as a resistance area during bearish market. We can expect the RSI to form a higher low this time, probably encountering support at around 30-35 RSI level. D.) Looking at the weekly chart, we can see a positive move by the MACD, which is in position to cross the signal line.

For the coming week, the index may move lower as an effect of the gap down. So it is better to lock in any gains that were made for the past 2 week’s rally. For those trading the volatility, next possible entry is when the RSI reaches 30-35 levels.

ALI (Chart: Daily Resistance: 11.50 Support: 9.50)

ALI is showing signs of a possible double bottom. The neck line of the double bottom is at 11.50. However, it seems that resistance is now being encountered even at current price level of 11. The general market sentiment is still bearish, and this double bottom that we are seeing might not materialize. But a positive thing to point out is that MACD is now above the center line and price is now above the 65 day MA. Hopefully the 65 day MA would provide support and MACD would stay above the center line.

StockWatch (May 12-16, 2008): PSEi, ASIA

PSEi (Chart: Daily Resistance: 3050 Support: 2710/2670)

The index had a good 2 day rally last week. Volume for the last 2 days of trading was significant and it looks like it may continue for the coming week. The trough for the price and indicators is already visible and we are seeing a positive divergence on the MACD, RSI and Price. It is again good to note that the MACD never went lower and is currently oscillating near the zero line. Also the MACD is about to cross the signal line, so we can probably see more buying action next week. Still no sign of a reversal area pattern, so it’s still generally a downward trending index for now.


ASIA (Chart: Daily Resistance: 10 Support: 7.20/6.00)

ASIA is now out of a downward trend since Feb 2007 as it broke out from the resistance line and also a falling wedge area pattern. The target price for the area pattern breakout is around 16.00. The last 3 days of buying action was accompanied with a very significant volume. The only resistance on its way up is the 260 day MA at 10.00. Also looking at a larger picture, this stock seems to be forming a cup and handle formation. Watchout though for some profit taking action this coming week as RSI is very much overbought. MACD is looking good as it now crossed above the center line. You could probably buy the dips, but watch out if the price heads back to the breakout level at 7.20

Blogsite: Life, Money and Images by David Hanson

David Hason has a new Blogsite titled "Life, Money and Images" (http://davidhanson88.blogspot.com/). It's not just about trading and technical analysis, but it's a consolidation of all of his passions in life.