PSEi Outlook for Dec. 28 – 30, 2010
Monday, December 27, 2010 8:46
The Philippine Stock Exchange Index (PSEi) has started to test the resistance of the downward trading channel that we’ve drawn. And the fact is, it has a chance of breaking out from that area. At this point, we see that the index has better chances of going up than down.
First, not only is the PSEi at the resistance of the range, but at the same time, it seems to have formed an inverted head & shoulders pattern; a bullish reversal pattern. The 50-day moving average may serve as another area of resistance at 4180 but this would probably be not much of a problem. The MACD has been oscillating below the zero line but not that far. We could probably see a bullish move in the index by the early part of 2011 due to what the indicators are showing us.
If we will base our projections on the breakout of the trading range, then our upside target would be 4447. If it was based on the inverted head & shoulders, the target would be 4516, but it has to surpass the neckline at 4248. However way we look at it, we expect better things to happen in the index when the new year comes in. Happy New Year everyone!
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