StockWatch (Sep 12-16, 2011): PSEi, DIZ

PSEi (Chart: Daily Resistance: 4400 Support: 4290/4250)

Just when I thought that the index is moving up beyond the current sideways channel, the index again fell within the small channel between 4400 and 4290. The recent activity only shows how volatile the market is.

As of current, the sideways channel between 4400 and 4290 still holds. There are a couple of stocks that you can play on this ranging market, but for the risk averse, it would be better to stay on the sidelines until the index is able to breach beyond the 4400 resistance line with high value turnover

DIZ (Chart: Daily Resistance: 14.40 Support: 9.80/8.40)

DIZ had a spectacular run up with large volume even going beyond the resistance line and reaching 14.40. With that kind of volume, this may definitely go way beyond the channel that it has created since July.

As of current, the stock is very much over bought. It would be prudent to lock in profits for now, probably sell ¾ of your position. This stock definitely has the potential to go beyond 14.40, but it would eventually fall back one of these days and I would rather recommend to sell now and buy later when the stock reaches near 11.50 (50% retracement).

Do not forget to observe the volume, any increase in volume on the downward movement would be a sign to cancel the idea of a buy back near 11.50.

StockWatch (Sep 5-9, 2011): PSEi, DIZ

PSEi (Chart: Daily Resistance: 4400 Support: 4350/4290)

The index is still treading the line plotted by the 65 day moving average and it seems that it has confirmed a sideways channel between 4400 and 4290.

If the index breaks out of that small sideways channel we could see the index moving back up to the previous high near 4550.

Considering the stochastics, RSI and MACD, all three are giving a higher credence to the possibility that we may be seeing some upward movement for next week.

However, I wouldn’t go long for now. I would rather go long only when the index is able to create a higher peak with no signs of bearish divergence. For now just trade the range.

DIZ (Chart: Daily Resistance: 11.76 Support: 8.10)

DIZ is an eye catcher for its long spread and large volume on the last trading day last week. There is an upward potential of up to P13 based on the resistance line connecting the previous peaks.

Buying at the current price 9.50 and selling near the previous high at 11 would already give you around 14% net profit.

This is definitely a buy but only for the short term.

StockWatch (Aug 29 – Sep 2): PSEi, ORE

PSEi (Chart: Daily Resistance: 4400 Support: 4300/4220/4180)

The index is still on a sideways movement, treading the line plotted by the 65 day moving average. Whatever gains made on Tuesday was taken down on the succeeding days of the week. So it’s still a power play between the bulls and the bears, with the bears slightly winning because the upward movement of the index was not sustained (i.e unable to create higher peak).

The only solace that we could find in the current condition is the fact that the index still hasn’t nose dived again like it did in the second week of August. So we might be seeing a slow decline in the index for the succeeding weeks, but at least it is not a sudden decline.

Again expect the index to move sideways ranging between the 65 day moving average (4340) and the 130 day moving average (4220).

ORE (Chart: Daily Resistance: 5.74 Support: 5.00/4.80/4.00)
If you are still riding ORE, now is the time to get out of the stock temporarily. ORE has had a good run up for the past 2 months. Even with the recent general decline in the market ORE has continued to move higher. But unfortunately the ride will come to a stop and it looks like this is it.

As seen in the chart, it is very evident with the RSI, MACD, and stochastics that the stock is now exhibiting bearish divergence with the stock moving higher, creating a higher peak, while all 3 indicators are creating lower peaks.

The next support for this stock in near 4.80, if support holds, then you could buy back a smaller portion just to take advantage of the possible bounce, but do not hold it for long.

StockWatch (Aug 22-26, 2011): PSEi

PSEi (Chart: Daily Resistance: 4440/4500 Support: 4340/4200)

The index made no progress for last week. It went flatly sideways with high instability. Progress made by the index on one day is taken back on the next day. The sideways movement of the index last week would definitely be an indication that the bounce from the market crash 2 weeks ago has reached the maximum height. There are no bullish indications on the chart that says otherwise.

For next week expect further sideways to downward movement. It is highly possible that the index would just range between the current high and the 130 day moving average.

StockWatch (Aug 15-19, 2011): PSEi

PSEi (Chart: Daily Resistance: 4330/4440/4650 Support: 4170/4080)

The index continued its downward movement creating a very large downward gap on the second day of trading.

The support that I was expecting near 4330 which is the 65 day moving average was not able to contain the strength of the bears which resulted into further downward movement towards the 130 day moving average near 4170. Luckily, support at the level of the 130 day moving average was able to hold the bearish action from further strengthening.

The succeeding trading days saw the index bounce from the 130 day moving average and even closing the gap that was formed on Tuesday. Question is whether this incident would usher the continued upward movement for the index? Well, I believe otherwise. Even though the gap was closed, that incident is not a veritable comeback of the bulls. It was just a natural reaction to the RSI level reaching the low of 30 level. If that was a real comeback for the bulls, then the last trading day would not have formed a short real body with a very long upper shadow; preventing the index to move above the 65 day moving average. The last trading day showed that bears still have influence over the index.

For the succeeding days expect a ranging action in the market. We will be seeing a battle between bulls and bears as the index move between the 65 day (red line) and 130 day(yellow line) moving averages.