This blog is committed to the serious study and valid understanding of technical analysis and its objective application to stock selection, risk management and execution primarily in the context of trading stocks listed in the Philippine Stock Exchange (PSE).

Tuesday, January 22, 2008

PSEi, 1/22/08

OHLC: 3121 - 3121 - 2953 - 2978
Change: -173.89 (-5.6%)
Value turnover: 4,370,611,000
NFB: -496M
Net adv/dec: -144
Net up/down vol: -2,998,753,660

The potential double top formation on the weekly chart is ominously approaching the critical level of 2874. When the PSEi hit this level in Aug172007, it bounced and rallied until Oct112007 quickly recovering the losses during the Jul to Aug decline. Prior reaction lows are potential areas of support and since 2874 is the 2007 record low, many traders will be looking closely at how the index will behave when this level is reached. As of now, market breadth indicators figure that odds are in favor that this support will be broken. If it doesn't hold up, then the double top is deemed complete leaving the index vulnerable to further declines toward the 2000 level.

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