It is official: the Philippine Stock Exchange Index (symbol: PSEi) is in corrective mode after it had topped out on March 7 (6,550.94), broke the ascending trendline (seen here – exciting price action as expected), and subsequently failed to even touch the 6,500 level this week.
Now, we will see what bulls are made of and what bears are truly capable of.
Bulls should again make an attempt to reconquer the 6,500 level. This is crucial to keep the bears at bay. On the other hand, bears won this week and succeeded in preventing a takeover of 6,500, so they will aim for another leg down in the coming weeks. An incomplete ascending trendline points to 6,100.
I would like to see strong participation from bulls around 6,100-6,300, lest bears would rejoice and grew more confident in their bear assault in the last 2 weeks.
Is what we’re seeing an increasing risk… or opportunity? It could get rough in the last (full) week of March. Stay alert and protect your portfolio (if required)! Bottom pickers should pick their desired stocks carefully.
Key areas to watch:
Resistance: 6,500, 6,600-6,800
Support: 6,000, 6,200-6,300
Reference chart: http://www.tradingphoenix.net/2013/12/30/psei-the-year-ahead/