The Philippine Stock Exchange Index (PSEi) gave many traders something to cheer about last week.  It was able to surpass the year’s high of 3342 by reaching a high of 3367 on Friday, signaling what could be a chance for the index to rise above the current consolidation.  It has been observed that the PSEi has been trading within the range of 3147 and 3338 and it has recently breached the range.  However, this does not necessarily mean that we should all rejoice and start a buying spree as this recent breach is still not indicative of the start of a new trend.  It is quite possible that the index could just continue its sideways movement.

Since the PSEi momentarily breached the uptrend support on May 25, it still didn’t break that as the 130-day moving average supported the index which then led to it continuing on a higher level.  The MACD lines have started to move higher indicating that the index could be readying itself for a short term run.  But until we see that PSEi does move much higher than current levels, it is best that we still stay conservative with our trades.

Overall, since the uptrend support of the PSEi remains intact, we are still bullish with the market.  So our best case scenario with the index is that it is poised to go higher soon.  The worst case scenario is that it will just continue the consolidation.

Recommendation: Wait and see
Support: 3338