As expected, the PSEi has broken the neckline of the double top that we saw the other week.  This doesn’t look good for us.

For the moment, the 130-day moving average at 2917 is supporting the index, but it could only be a matter of time before this too gets broken.

The other indicator that shows that we are turning bearish momentarily is that the MACD has now fallen below the zero line.  Add to that, the downward momentum is accelerating.  So I guess that means we shouldn’t be that jubilant when the market rallies as it’s just an opportunity to sell.

For this week, we should expect more red days for the PSEi.  Lighten up, people.

Recommendation: Sell
Resistance: 2977

Something felt wrong when we saw the PSEi break the 3 support lines of the fan before.  True enough, it’s now showing us why.

Using the fan principle, it’s said that when the 3 trendlines of the fan have been broken, an imminent reversal of the trend is just around the corner.  While it still wasn’t clear at that time, and we were still hoping something good comes out of it, we finally see that the index is forming something that looks like a double top.  We are not yet sure if this really is a double top or it could be something else since the neckline of the double top is not yet broken.  Assuming that this is a double top, the neckline is pegged at 2977.

Using the logarithmic chart, once the neckline is broken, we could see the PSEi going down to 2828.  Should this happen, we definitely will see that the 130-day moving average would be broken at 2899; that would be another bearish move.

The MACD has long been telling us that the momentum has been slowing down even while the index was going up.  This in itself was a bearish move, and an early warning sign.

We were warned before and now we have to follow the trend. The latest 200 point drop of the DJIA would be enough reason to push the index down again this week.  The question would now be how far would we go?

Recommendation: Sell
Support: 2977

Booyah! Finally ANI broke out of its consolidation and closed the previous trading week strong. It’s going to be an exciting week as I see the bulls to further push the price higher, but don’t get too excited. There’s a high chance that the 31.5 - 33 will get hit but near that level, traders who bought near the top and near 24/25, especially the short term traders may start selling possibly depressing the price between 25 and 26.5. As you can see in the chart below, there’s a  Bearish Gartley that may potentially form if ANI hits 31.5 - 33 in the next couple of weeks. When that happens, you may take some chips off the table then just wait for another opportunity to buy back at a lower price. Sell some, hold some.

My ultimate target for ANI is unchanged at 40.

Potential Bearish Gartley Pattern. Sell 31.5 - 33

The good news is that the PSEi has reached and surpassed our near term target of 3114.  The bad news is that the momentum of the index seems to be weakening even further.

The next level that the PSEi must breach is 3130 and that’s just around the corner.  However, knowing that the momentum is slowing down, we’re getting apprehensive about the index’s capability to surpass this at this point.

The moving averages still look okay at this point but it’s the MACD that we’re worried about.  Every week we’ve been seeing that the momentum of the MACD has been slowing down on the bigger picture.  Yes, the fast line is curving upwards but that’s on the short term.  Overall, we’re not gaining ground until the MACD surpasses the high of December 2009.

Again, there are opportunities to make a profit.  However, we should be cautious knowing that at any time, the whole market could turn around and leave you crying.

Recommendation: Trade cautiously
Resistance: 3130

As of this writing GBPUSD is strong on the long on side but instead of going long I would counter trade this trend by shorting it. There are two reversal harmonic patterns I see, a Bearish Gartley on the 4-hour chart and a Bearish Butterfly on the hourly chart. Both reversal patterns points to a sell short price between 1.6330 and 1.6350. Once the price hits that level, price action will be observed. Our entry will be based on the 15 minute chart which I will post later on.

If we are to be aggresive on this trade, we may place our sell short orders between 1.6330 and 1.6350. Stop loss will be placed at 1.6420 then move to breakeven stop on 60pips profit. Targets will be C and A in the hourly chart.

Disclaimer:
Foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits. Foreign exchange and derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. Absolute Traders does not take into account special investment goals, the financial situation or specific requirements of individual users. Hence, you should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.

Although the PSEi has been going sideways for some time now, the recent trading days’ action has been quite encouraging.

Even without any leads, the index’s performance has been quite bullish. So much so that it’s quite possible that 3114 would be reached within this week.

The MACD is also encouraging as the fast line has crossed above the slow line once again, showing us that momentum is swinging back to bullishness.  However, we should still trade with caution as anything can happen.  Should our targets be met, let’s not even think twice about taking our profits.

You know what they say, save for a rainy day.  Taking your profits now is our way of saving for the rainy day.

Bullish Gartley harmonic pattern on the 4-hour chart. Entry on the hourly chart.

Buy price is at 1.0310 (127% fib extension) and If the price closes above that blue line, that’s a buy for me.

B: 1.0310 / Trendline break
S: 1.0280
T: 1.0530 / 1.074

Move your stop to break even when 1.046 is hit.

Disclaimer:
Foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits. Foreign exchange and derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. Absolute Traders does not take into account special investment goals, the financial situation or specific requirements of individual users. Hence, you should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.

This is my first trade idea for 2010 and I hope it would be a profitable one.

My bias for this pair is on the long side but I wouldn’t mind taking advantage of retracements.  I already  shorted USDJPY at 92.17 and 92.5 which is within 61.8% and 78.6% range. Take a look at the chart below. USDJPY broke the uptrend line in the hourly chart then retraced back up to test that trendline which from support became resistance. I shorted near that area. For this trade my target is at 90.85.

Now let’s switch to the 4-hour chart. I drew another uptrend line which was tested 3 times and to make it more valid, MA(800) is just right below this support line and a bearish RSI divergence is present. Once the price closes below that support line, sell short at market price. Stop loss shoud be placed at 92.9. As for the target, you set your first target at 90.85 or just let your profits run until USDJPY reach 87.35. Adjust your stop to break even on 60pips profit or when 90.85 is hit.

It has been a profitable year for us traders. The PSEi bottomed at 1684.75 and from there it went up to a high of 3130.43, 766.31 points short of the 2007 high at 3896.74. To sustain this bullish trend, the PSEi and other indices must correct or consolidate which I think will be the case in the first two quarters of 2010. Though it’s a possibility that the PSEi might go up to 3425 (78.6%) level but I don’t think it would go beyond the 2007 high. The index must correct before it could do so.

As I see that most stocks in the PSE will correct or consolidate in the first two quarters of 2010, I see stocks that will shine in the 1st and 2nd quarters of 2010.

ANI (AgriNurture, Inc.)

Added in my hit list last December 21st, there’s nothing new in the chart except the price is nearer the resistance line (red line). Will it break the resistance line in the first trading week of 2010? If it does, it is important that the breakout is accompanied by volume. As of now, the buy price is still undetermined. Stop loss should be at 23.75, targets are at 31, 35 and 40.

LC (Lepanto Mining Corporation)

LC closed strong in 2009, probably due to end of the year window dressing. Nevertheless, the chart looks good and I still recommend a buy. In addition to my analysis posted in the hit list, I see a symmetrical triangle pattern suggesting a target of 0.45 which is 78.6% fib retracement. Buy price is at 0.25 or better, stop loss should be at 0.21 and take profit targets are 0.39 and 0.45.

MA (Manila Mining Corporation)

MA’s chart actually looks similar to LC’s. There’s great potential for this stock, just take a look the volume; it’s pretty wild. Buy price is between 0.023 and 0.025, stop loss at 0.02 and target is at 0.04 which is 224% fib extension. Immediate resistance is between 0.027 and 0.03. If you bought at a lower price, you may take profits between that level but if MA go beyond 0.03, I don’t think you can get MA at a cheaper price.

There are stocks that are in my watch list that I’m yet to do a detailed analysis. They are:

AC
CMT
GLO
VLL

That’s it for now. Good luck to you and may we have a profitable 2010!

The PSE ended 2009 with a whimper.  Even if the last trading day of the year produced a green day, it was still uneventful as most people were on vacation, either literally or figuratively.

Obviously, we are still in a sideways movement.  In fact, we wrote earlier that the index looks toppish.  However, we can’t say for sure if this is a reversal or it’s just a pause in the uptrend.

The moving averages are still in bullish mode but the MACD has long been warning us that the momentum for the PSE has been declining.  We should be ready at any time in case things would turn sour.

Hopefully this new year will bring us more things to smile about and not more headaches.  With that, we bid you a prosperous 2010!