StockWatch (Oct 11-15, 2010): PSEi, GMA7, APC

PSEi – Weekly chart

PSEi (Chart: Daily Resistance: 4350 Support: 4222)

The index has been continuously moving upward with intermittent short downward movement. It looks as if this kind of action in the market may continue for 2weeks to another month before a major correction happens. The daily chart is showing negative divergence between the RSI and the index which could signal an upcoming downward movement. Looking at the weekly chart, the RSI shows an overbought level that supports the possibility of an upcoming correction. For the coming week, you could either stop accumulating for the mean time or start disposing a portion of your portfolio and buy back after the upcoming correction.

Note: A lot of stocks have reached or about to reach their previous high which means strong resistance is being encountered or will be encountered thus a possibility of sideways to downward movement.

GMA7 (Chart: Daily Resistance: 8.80 Support: 7.25)

GMA7 had a breakout from a downward channel with trading last Friday creating a gap and a tall white candle accompanied with large volume. It looks like this upward movement is a bounce from support near RSI of 50 coming from the RSI high. The MACD is also looking good with a possibility of a cross above the signal line. The only problem with this stock is that resistance is near at 8.80 (previous high).

APC (Chart: Daily Resistance: 0.95 /1.28 Support: 0.84)

APC also had a breakout from a sideways channel accompanied with a large volume and a gap. Target price is near 0.95. The MACD is also about to cross above the signal line, so there may be more to this stock beyond the target price.

StockWatch (Sep 27 – Oct 1, 2010): PSEi, LCB

PSEi (Chart :Daily Resistance: 4125 Support: 4023/3900)

The index has continued to move sideways last week. We might be seeing the index move in between 3900 to 4125 before it once again move upward. Expect the sideways to downward action until probably when the RSI reaches near 50 to 60 level. For those going for long term, this is an opportunity to buy the dips, while for those whose objective is short term, this would be a time to lighten your load and take advantage of a possible ranging action by the index.

LCB (Chart :Daily Resistance: 0.75 Support: 0.6 /0.43)

LC and LCB are stocks to avoid for next week. It is very evident on the chart that the recent run up would be short lived as an almost equal amount of volume is seen on the downward action last Friday. For those holding this stock, it would be best to sell while the price is still high.

StockWatch (Sep 20-24, 2010): PSEi

PSEi (Chart: Daily Resistance: 4021 Support: 3955/3900)

The index moved sideways for last week instead of moving downwards to the previous resistance turned support at 3900. Again RSI is still very much overbought, expect the index to move sideways to downwards next week. Immediate support is at 3955 which is the trend line for the past 3 weeks, next support is at 3900, which is the previous high. The sideways to downward movement might continue until the RSI bounces from the 50 RSI. In either way you see it, next week would be a chance to lighten your load and buy near support levels or a chance to add more to your positions, both cases would be a good strategy as the Moving Averages are in the right order and it looks though that the lines are starting to open wide, especially the 65 day MA.

StockWatch (Sep 13 – 17, 2010); PSEi

PSEi (Chart: Daily Resistance: 3902 Support: 3435)

The index is very much on the doorstep of the previous high of 3900. Next week would be a deciding factor if the index would be able to break away from the previous high of 3900. I believe that we would be seeing lots of selling action next week as the RSI is way too overbought. If the index starts to move downward next week, watch out for support when the RSI gets near the 50 to 60 level. Even if the index would not be able to move beyond the resistance line, just the 2 week rally accompanied with a large value turnover somehow gives some form of assurance that breaking of previous high is not far away.

Also, I noticed one very promising thing when I looked at the index’s quarterly chart. If my Elliot Wave count is correct, we might now be in the 3rd wave. Usually the 3rd wave is the longest wave and just looking at how long was wave 1, it just leads me to speculate that wave 3 might be atleast twice that of wave 1. This is definitely a trader’s heaven and a time to go long.

StockWatch (Sep 6-10, 2010): PSEi, BPI

PSEi (Chart: Daily Resistance: 3739/3900 Support: 3566/3451)

The index had a good rally last week, with a gap forming on the third day of trading. The gap was accompanied with large value turn over, so this gives credibility to the rally and gap.

Something to watchout is the upcoming 3900 level, which was the previous high of 2007 that started the bearish sentiment from 2007 to 2008. This is undoubtedly a major resistance to watch out.

Also, the index is once again in the overbought level, watchout for the RSI whether it would be able to supersede its previous high. If not, this may be exhibiting a bearish divergence where the index was able to move higher, while the RSI wasn't able to do the same.


BPI (Chart: Daily Resistance: 54 Support: 48)

The long awaited breakout happened for BPI last week. One could say it’s a breakout from a complex inverse head and shoulder formation or a rounding bottom either way both formations point to 65 as the target price. However, expect a downward movement next week for the short term as the RSI is very much overbought.