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).

Wednesday, April 9, 2008

PSEi 4/9/08 PHILIPPINE STOCK MARKET TECHNICAL ANALYSIS

OUTLOOK
The local composite index drops another 19pts on moderate volume. It opens just about even and declines until the end of trading hours. There's nothing much to say about today's chart except that the stock average is trending down in an orderly fashion. The peaks and troughs of the trend coincide almost perfectly with the extreme swings of the stochastic indicator. The intermediate trend exhibits a textbook "left translation" that is typical in declining cycles where the duration of impulse waves (downlegs in a downtrend) last longer than the corrective waves (correction rallies in a downtrend). This "well-behaved" descending trend also provides a convenient example for the application of the Elliot Wave Principle(EWP) where one could argue that the last trough in mid March-2008 is the #5 wave of a downtrend that started in Oct-2007 and therefore a 3-wave correction to the upside should follow shortly. It will be interesting to see what happens from an EWP perspective. In the meantime, invoking the Dow Theory's tenet that a trend is valid until proven otherwise, the measured move method yields a potential price objective of 2,500.

PRICE AND TURNOVER
Close: 2,961.78 * Change: -19.34 (-0.65%) * Value: 2,548,138,000

MARKET BREADTH
Net Adv Issues: -66 * Net Foreign Buying: -221,521,264 * Net Up Volume: -367,367,750

TECHNICAL ANALYSIS
Major consolidation * Intermediate downtrend * Minor downtrend * Support 2800 * Resistance 3000 * Price objective of current downleg 2500 * Double top on the weekly chart

No comments:

Post a Comment