The Philippine Stock Exchange Index (PSEi) has given us hope as it is only recently that the index has shown us clearly what it is going through.  We are in the midst of a falling wedge, a pattern that is bearish at first glance but is bullish in nature.

As we said earlier, the critical point that the index needs to respect in order to continue the uptrend, is 3850.  It came very close to that last week as the PSEi dropped to its lowest level of 3881.  The index has bounced off that area since then.

The 50-day moving average has already crossed below the 100MA, giving us a bearish indication.  At the same time, the MACD continues to hover below the zero line.  But these indications are to be expected when a consolidation is happening so we shouldn’t be too worried.

The index needs to break the resistance of the wedge at 4144 but it will meet some resistance at 4100 as the two moving averages are there acting as resistances also.  Once these levels are surpassed, we could see the PSEi move to its upside target of 4536, which we expect to be a new all-time high.

It may be a good time to just wait things out if you’re liquid.  If you have positions, a little patience is needed before the uptrend is continued.

Recommendation: Wait and see
Resistance: 4144