News / Philippine Stock Market

PSEi Outlook For Feb. 26 - 29, 2008 By Bonner Dytoc February 24, 2008

Bearishness becomes us.  That’s right, the bearish sentiment in our market still lingers.  Actually, the bearishness is still considered for the short-term duration and not for the long-term outlook, at least not yet.

We already know that we have been going sideways since October of last year after achieving a new all-time high of 3896 back in Oct. 8, 2007.

Although there are no clear areas of consolidation to give us any targets on the upside or downside, two things concern us. The first is that prices have stayed bearish since the start of the year when it could not breach the moving averages and it has hovered below that since then.  The second and probably more telling indicator is the MACD.  Since 2003 when the market has turn around from a downtrend, the MACD has oscillated primarily above the zero line.  Even when it dipped below the zero line recently in March & August 2007, it has managed to bring itself back above the zero line.  Now, the rally for the index in January wasn’t enough to revive the MACD to venture above the zero line.  In fact, the MACD’s fast line has cross below the slow line once again.  This does not bode well for us.  It looks like an early El Nino season for the index.  Unlike the weather forecasters, we are not sure how long this drought is going to last.