News / Philippine Stock Market

PSEi Outlook For Jan. 7 - 11, 2008 By Bonner Dytoc January 05, 2008

The consolidation of the market continues for the start of 2008.  We may be experiencing huge volatility but the volume has not been picking up yet.

For whatever reason that’s causing the low value turnover, we should be cautious in our selections. There could be some issues that are reacting due to certain commodities’ performances like oil and gold. But if we take a look at the bigger picture, these outcomes may be nothing more than knee jerk reactions. Since there are no leads in the local front, the index has been following for the most part the DJIA.  Other global markets have been doing the same.

The 65-day and 130-day moving averages are oscillating with each other, telling us that consolidation is still happening. The 260-day moving average has yet to involve itself in the current situation. But its current level may serve as a support should the index fall to the level of 3389.30.  If it does, the index is still caught inside the channel.

The MACD shows us also that consolidation is also happening as it is oscillating around the zero line.  It is not giving us a clear sign of its momentum. Therefore, we should be careful.

The best thing to do in this situation is to wait on the sidelines until the trend is clearer.