Following last Monday’s corrective bounce, the PSEi is back in the red on today’s session earlier in the morning. The PSEi closed 70 points lower, or -1.69%, as the Philippine stock market continues to correct from its recent all time highs established two weeks ago. Looking at the weekly chart from the early of 2009, the PSEi’s ascent has been too steep, and could not be sustained. As seen in the chart below, price needs to move around the 3,900 trend support, before making any upward move.
As it stands, I expect the local market to consolidate between the 3,900 and 4,400 levels, with an immediate bearish bias in the short term. The Philippine market needs to consolidate, or correct even further, in order to allow itself to have fresher legs for the next big push above the 4,400 level.
However, if the uptrend line since 2009 is broken, then a bearish episode for the PSEi may emerge, with an extend consolidation period at best. Trading strategy at this point is to stay at the sidelines, until the stock market manage to find its feet. If you’re still holding any positions, if it’s already below support levels, you better sell on market strength, as this kind of market may persists up until the end of the year.
By the way, congratulations to SMB stock holders! I’m just here to remind you to not become too greedy. ;) Hehe.
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