Thanks to a member of Absolute Traders for pointing this out to us. I was too fixated on the one year chart that I didn’t notice that TEL has formed what seems to be a head and shoulders pattern.

This is now a secularized pattern since this was formed over a year, so don’t expect the volume to follow what’s written in the books. Anyway, seeing that TEL has consolidated for nearly 2 years, we can now plot the neckline, which is now at 2300. This has already been breached and the price is already below the neckline. Given how these patterns react, we expect TEL to move to lower levels. Our downside target for it would be at 1595.

Please note that the PSEi places around 25% of its composition in TEL. So if the stock drops, expect the index to take a heavy hit.

I hope I’m wrong but with the way things look, TEL’s descent may be inevitable.

Recommendation: Sell

Resistance: 2300.00

Target: 1595.00