Things are getting more and more interesting in our local market. It makes me think that our local market already has bottomed out. One stock we could add to our buying list is ALI.

Like all stocks in PSE, the stock made a spectacular move from mid 2005 up to mid 2007. Looking at the chart at fig. 1, it formed a nice symmetrical triangle setting up that spectacular move. Using Fibonacci, you will see that before it broke out from the triangle, it bounced from the 61.8% fib retracement level targeting the 161.8% extension. The trend is so strong that it just did not stop moving up. In this case we should start to observe the 224% and 314% levels and look for selling opportunities.

fig. 1

ALI reversed near the 314% level Fibonacci level, then the price retraced almost exactly at 78.6% targeting 127%. Again, the trend is so strong that price just pierced through our Fibonacci support levels and bounced off the 224%. At this point we should start to look for buying opportunities.

Looking at fig. 2, I’ve drawn a bearish trend line. If the price closes above this line that is buy signal for me. Another buying opportunity is at 61.8% or 78.6% retracement level. I don’t have any target for this yet.

fig. 2

Recommendation: Wait