Thursday, May 19, 2011

BEL – Triangle Breakout Imminent?

Earlier today, BEL attempted a worthwhile attempt to breakout from the symmetrical triangle it is forming since the beginning of 2011. It went as high as 5.95, before settling and closing at 5.80. Still, a breakthrough could be made on tomorrow's trading session. And if a price breakout does indeed happen, BEL could be targeting a nice 9.00 digit.

A clear cut above the 6.00-6.10 levels would signal the breakout from the symmetrical triangle, especially if accompanied with significant volume. As it is, a good entry point is going to be just above the 6.00-6.10 levels, or one could wait for the pull-back after the immediate breakout. Which is likely, since after the 6.10 levels, the next resistance is at the 6.50 level.

In the event of a breakout, and one does make a position with BEL, stops could be placed just below 6.00, as this would mean that breakout is false, and that the consolidation still is not over. Still, as shown from the weekly chart posted above, BEL's uptrend still is going strong, just as directional bias is still pointing upwards.

Monday, May 2, 2011

Mining Stocks Very Bullish, as PX, LC, MA, NIKL Creates New Highs

PX has now broken out from what appears to be a pennant formation at 18.00, and now looks on course to retest the 20.00 key resistance level. Also, rumor has it that there will be a special block sale to be transacted at 21.60, so if there is indeed truth to this, they need to push the price of PX to within 5% of 21.60, before the special block sale can be done.

If you don't already have PX, a nice entry point should be any price near 18.00. However, if the train continues to steam ahead, don't try to chase the train. Trading stop for PX should be below 17.30.

LC and MA have both registered new highs, with LC closing at 0.69, and MA at 0.041. Sky seems to be the limit for these two issues, as little resistance are being offered at these new highs. However, the same cannot be said for LCB, which according to the rumor mill, is about to be declassified, and to be merged with LCB, which could explain its 2.6% drop and close at 0.75.

NIKL has alro broken out from a rounding bottom area pattern resistance of 23.00, and also establiehed a new all time high of 23.70, and close at 23.55. When one measures the breadth of the area pattern, price target for NIKL looks to be at 27.00, within a three-month time frame.

This is a steady stock, so don't rush to get in if you were unable to buy on breakout. Wait for a price pull back, and try to get in as near as 23.00, with 22.00 the stop limit for this trade.

However, as can be seen on the weekly chart of the PSE's Mining and Oil index, this sector continues with its meteoric rise since early 2009 as rising commodities prices, particularly gold and oil, makes for a very bullish market for all the miners and oilers out there.

However, this sector is about to reach the resistance line of the bullish trend channel, so some caution should be in one's thought, if ever one's going long in this sector.

Wednesday, April 27, 2011

FGEN Continues Pushing for New Multi-Year Highs!

FGEN is on a fresh 2 and a half year high, as it finished today's trading at 14.52, a level not seen since June 2008. With a strong close and with healtyh volume, the next target in sight is the 15.80 area, and this is only the beginning.

To postion for this trade, try to wait for a pull back, and to a price as near as possible to 14.30, the break out point.

Zooming out from the chart, FGEN appears to have broken out from a cup and handle formation area pattern, giving it a price target of at least 18.00, within an 8-month time frame. So for long-term positioners, FGEN looks good and safe bet. For swing traders, 15.80 is good immediate price target.

Power companies now seem to take center stage, with FPH also making a continuation move from a flag formation to finish up by 3.3%, and EDC consolidating within an area formation where a significant price action may be imminent. AP, however, lags behind. But its long term uptrend remains intact.

Returning to FGEN, 14.20 might be a good tigh-cut level, with 13.20 as the absolute cut level. 

Monday, April 25, 2011

MBT, BDO Breaks Out, as Banking Issues Lead the Way

Banking in general performed very well on today's trading session, with MBT and BDO breaking out from their immediate price resistances. Overall, market was up, and looking on the charts, it seems that MBT and BDO might still have some legs in continuing the recent bullish move of the local market.

MBT, after consolidating between 66.00 and 69.00 for the majority of April, finally managed to slip past the 69.00 immediate resistance level to close at 70.50, with a high of 71.25. With the needed volume spike not present in this move, target price for MBT in the meantime is at 75.00. Just buy back MBT again, if price action allows it to move higher than 75.00, and accompanied with volume. Stop limits on the other hand, could be placed just below 67.00 for safety purposes.

For BDO, it seems to have broken out from a cup and handle area pattern resistance at 54.00. But as with MBT, BDO's bullish move today was not supported by strong volume, making the confidence level for this trade not that high. Based on the area pattern, we could see this issue to try and retest the 60.00 resistance level, before attempting to test the recent high of 64.00.

PNB also made a strong move, finishing the day at 65.90, up by 5.4%, and could well be on its way to test the 68.60 recent high. Any breach of this high could allow PNB to attem once again to take the 74.00 key price barrier. But for the meantime, wait and see if PNB can manage to find a way above 68.60.