PSEi: What Next?

[tarantrader]

Talagang sinusubukan mo ang kakayahan ng ating anti-spamming device.

[betheone]

Well, at least alam natin it works. Sund3r, boring ba market kaya naisipan mo ito?

[yeahbah]

Baka mamaya sagutin na lang kayo nyang anti-spam robot natin muhehe

[kewldude]

so back on topic... whats next for psei? pending correction? or are we going to reach new highs this month...

[betheone]

revisiting the fan lines of Genkumag. We are right on top of the third fan line. caveat.

[genkumag]

Today's price action all but invalidated the previous bearish looking pattern on the index (see dineshsbhatia's post). The net foreign buying the past week coupled with the slightly broad-based rise of issues are compelling reasons to think that the index will continue to head up. But to my mind, the gap up over the 78.6% Fib level today was key and also provided the clue as to where the PSEi is headed to next.

My near term target is 3420, from which I expect the index to retrace and for the next leg up to an intermediate target of 3525.

After that, bahala na po si Batman.

I've attached two charts to illustrate how the aforecited levels were arrived at.

Comments as usual will be appreciated.

[traderpinoy]

im still bearish PSEi, downside risk is greater looking at the charts. sideline is the best trade imho.

[genkumag]

After being wrong footed by the market when it posted that new high last week, I went back and studied the price action over the past month to determine where the index intends to go to next. Taking off from the spinning top last Friday, the two scenarios that seemed more likely than others are:

(A) Breakout of 3340 to 3440 (AB=CD move) after which it should retrace and move up again to whatever level.
(B) Correction off 3340, where it then correct steeply to the 3125-3150 range thus completing the potential Bullish Bat Pattern.

Personally, I prefer Scenario B instead of punching through 3340 and trending up again. A correction off 3340 to the aforecited range can potentially induce fear, and force weak handed investors to sell (again), allowing astute investors to pick up stocks cheaply and complete the consolidation by rallying off those levels.

I'm not too worried of any potential technical damage that this fourth correction may do to investors psyche. The market has shown its ability to rally off the support given ample liquidity in the system, and with the fundamental picture intact and supportive of domestic consumption and corporate earnings, it should be able to do so again.

But that's just me.

Comments as usual will be appreciated.

Regards,

GK

PS. I'm bored. Masyadong mahaba itong weekend na ito. Hehehe.

[genkumag]

Some Points on the PSEi:

(1) Potential Bearish AB=CD pattern nearly complete.

(2) Point D of the bearish pattern stands at 3,440 or the 2.00 Fibonacci Extension of BC leg (June 22-July 2), from which a pullback can occur.

(3) Ideal pullback is 3380 but a retest of previous resistance at 3355 is equally healthy.

(4) A correction below 3350 may pose certain dangers and represent a loss in momentum.

(5) An even chance of the CD leg extending itself to 2.24 and 2.40 Fibonacci before correcting exists. Watch money flows closely.

Comments will be appreciated.

[betheone]

GK, agree on the AB=CD pattern. Looks like we are retracing off the 161.8% at 3470. My immediate support is at 3415 based on the previous resistance which hopefully will become a support.