About a month ago, I issued a recommendation to buy PIP between 1.88 and 1.92. The buy recommendation was based on a potential Bullish Gartley. The pattern was immediately invalidated when PIP failed to break P2 and rebounded from there. Looking at the current chart, PIP has closed above the resistance line (red line) with above average volume. In my book, that is a buy. I would recommend to buy anywhere near 2.3. We don’t know what the market will do, it may suddenly spike up or correct a bit, so buying at market isn’t a bad thing.

If PIP continues to go up and breaks above 2.55, you should then be looking to sell between 2.7 and 2.9 where the potential Bearish Butterfly will complete. Assuming all indicators (if you use any) and sentiments are bullish and PIP is above 2.55, it is more likely that PIP may reverse from 2.7 as this is where the 161.8% of CD converges with the 127% of XA. Fibonacci levels that converge with another level can be a strong resistance or support.

Buy: 2.3 / Market
Stop: 2.18
Targets: 2.55 / 2.7 / 2.9

Trend line break, Potential Bearish Butterfly

This week was another improvement to last week’s performance for the PSEi.  This, despite the lack of leads for the market to follow.

The index pushed itself higher from the 65-day moving average, which is serving as a support at 3012, by ending the week at 3069.

Although the PSEi is now trending higher, I’m still not too sure if this is now the start of the bull run that everyone is waiting for.  The only time I’ll probably be convinced that we are in the next bull run is when the recent high at 3133 is taken out convincingly and the index continues to trend higher.  For the meantime, and from a conservative point of view, it’s trending higher for the short term.

The moving averages may be in an extreme bullish setup, but the MACD finally confirms that we are bullish for now as both fast & slow lines are above the zero line and trending upward.

With the current setup, there are selected opportunities that will present themselves.  We shouldn’t hesitate to take them but we should also be careful at the same time.

Recommendation: Trade cautiously
Support: 3012

The past week has been relatively good for the PSEi.  Not only has the index been trading off the lows of February but is now on its highest level since.

The PSEi has been able to prop itself up above the support of 2977 since last week and we saw that the 65-day moving average, now at 3013, would serve as a resistance for the index.  But as of now, the 65MA is already acting as a support when the index ended above it at 3043.

The MACD fast line is already above the zero line so we’ve become a bit bullish on the index again.  So definitely, there is some momentum for the PSEi to go higher.

The only problem I have with all of this is the lack of significant volume as the market moved higher.  Either the same players held back and allowed the traders to do their thing, or there just was no interest from new players to come in.  In order for the PSEi to sustain its move, there should be an increase in volume.  That would definitely be a convincing move.  However, with the current scenario, I’m keeping myself cautious about this.  If I have anything that has some profit, I’ll sell on a rally.

The only time I’ll probably be convinced that we’ve resumed our bull run is when the recent high of 3133 is taken out.  But until such time, play it cautiously.

Recommendation: Trade selectively
Support: 3013

The bullishness of the PSEi continued when it broke the short term resistance line on Feb. 11.  Not only did we break the resistance at 2977, but we even tested the 65-day moving average at 3015…and then we came back to reality.

The index right now is caught between the 65 & 130MA, located at 2941.  It’s possible that the market will be consolidating for a while.  So we should expect things to be harder for us while this happens.

The MACD’s momentum looks like it will bring itself back above the zero line anytime soon.  That should be good news for the short term traders.  But knowing that it’s possible for us to be at the start of a consolidation, we should be quick in exiting any position after we have locked in our profits.

Recommendation: Buy cautiously
Resistance: 3015

Click here for the original trade idea.

Our first attempt to short USDCHF was canceled because instead of this pair breaking down from the support line, it went back up to break above 1.08. USDCHF tried to hold above 1.08 but failed so it went back down to retest the support line and then pierced through it.

Now how do we trade this? You can either place your sell limit at 1.0715 (38.2%), 1.0735 (50%) to 1.0760 (61.8%) or sell on breakdown from the bearish flag pattern. If the price closes below 1.0650 in the 15-minute chart, that is a sell for me. Place your stop at 1.0797 and as for the target, you can take your profits at 1.0565 (38.2% in the 4 hour chart) and 1.0345 (MA (800)). Move stops to breakeven on 60pips profit.

Trendline break. Descending Triangle breakdown. Bearish Flag Pattern.
Sell limit 1.0715 (38.2% ), 1.0735 (50%) to 1.0760 (61.8%)
Stop at 1.0797

Target 1.0565 (38.2%) and 1.0345 (MA (800))
Bearish RSI Divergence

Disclaimer:
Foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits. Foreign exchange and derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. Absolute Traders does not take into account special investment goals, the financial situation or specific requirements of individual users. Hence, you should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.

The PSEi had a good run last week…or so it seems.

Yes, the market rallied from recent lows to rise by 152 points in three days.  Sounds great right?  I kept wondering where the volume was while it was rising.  Due to this, I’m not convinced that this is the bull market that everyone is waiting for.

The short-term resistance has been broken.  However, without the volume accompanying it, I feel that the index can fall back easily to where it came from.

Seeing where the PSEi is going, it is now safe to assume that the nearest resistance would be 2977, the previous support that broke following the double top.  After that, the next resistance would be at 3015, where the 65-day moving average is located.

The MACD is showing us that this is definitely a rally.  The question now is can it be sustained, especially since volume is lacking?

The safest thing for us to do is to sell on strength, until the market shows us a confirmation that the market is on its way to higher levels.

Recommendation: Sell
Resistance: 2977

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This currency pair has gone up high enough and according to the AB=CD reversal pattern in the daily chart, it’s time sell short. Our sell short entry can be based on two time frames. You can either short it based on the 4-hour chart or on the hourly chart.

AB=CD Pattern

In the 4-hour chart, if the price closes below the blue line, sell short at market price. Take profits at 1.0465 or manage your trade and target each fib retracement.

4-hour chart, sell short setup

We have a similar setup in the hourly chart. If the price closes below the blue line, that’s a sell short for me. Targets are 1.0535 and 1.0415.

1 hour chart, sell short setup.

Set your stop loss price at 1.0730. Move stop to breakeven on 60pips profit. Good luck!

Disclaimer:
Foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits. Foreign exchange and derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. Absolute Traders does not take into account special investment goals, the financial situation or specific requirements of individual users. Hence, you should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.

As we earlier predicted, the PSEi would possibly drop to a downside of 2828.  This was already achieved last Friday as the index dropped to as low as 2826 before we saw a bit of a resilient market close at 2855.  I forgot to tell you that this is still a 50 something point drop.

If I were to apply a little Elliot Wave, then this current downtrend could only be the start of wave 2, a bearish wave.  So if that were the case, then we could probably see more downside to the index as it could retrace up to 2596, where the 260-day moving average is very near to, before we see the PSEi start recovering.

It’s very possible that the index could try to retest the resistance line of the downtrend, now pegged at around 2895.  Meaning it could only go up to that level before it starts going down again.  If we’re lucky, the PSEi could go as high as 2929, where the 130-day moving average is now located.

The MACD is showing us the downtrend has already gained momentum and it isn’t slowing down anytime soon.

Lighten the load if you don’t want to sink like the Titanic.

Recommendation: sell
Resistance: 2887

I think AUDUSD has gone down enough so I guess it’s time to go long. I’ll make this quick.

AB=CD on the 15 minute chart, extended up to 224% fib extension. Entry will be on the 5-minute chart. If the price closes above that blue line, that is a buy. Place your stop just below 0.8786, target will be at 0.889 and 0.9.

Fundamentals is on our side as RBA is expected to raise cash rate from 3.75 to 4 on Monday 10:30pm EST.

AB=CD

Entry line on 5-minute chart.

Disclaimer:
Foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits. Foreign exchange and derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. Absolute Traders does not take into account special investment goals, the financial situation or specific requirements of individual users. Hence, you should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.