The Philippine Stock Exchange Index, or PSEi, has just fallen below its immediate support at 4,060, and also below the psychological 4,000 level, bringing the much awaited market correction deeper. From the all time high established at 4,413 last November 5, the PSEi has now lost more than 10% in value, and more than 400 points.
While a lot of observers, including yours truly, have been calling for a meaningful market correction, it seems that the correction we all have been looking for has finally arrived. While the sudden drop in the local market may alarm investors, especially the new ones that have just invested on the market highs, the PSEi still remains healthy in medium to long-term charts.
Looking at the weekly chart displayed above, the market run-up from September to early November, have caused the index to deviate further higher away from the uptrend line established way back in March 2009. Now, the recent bearish market sentiments have caused the PSEi to somewhat move closer to this trend line, initial support for the index is seen at 3,900, with the 3,800 level serving as the key support level.
However, if these two support levels get broken, then you guys can now worry hehe.
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