PSE Trade Idea #102: Long PIP
Sunday, March 7, 2010 10:50
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
Targets: 2.55 / 2.7 / 2.9
Trend line break, Potential Bearish Butterfly
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