PSEi Outlook of the Week

Figure 1. PSE Price Chart

Price and moving averages:
PSEi has closed above its Short time moving average.
Short time moving average is currently below mid-time, and above long time moving averages.
The relationship between price and moving averages is: neutral in short-term, and neutral in mid-long term.

Bollinger Bands:
PSEi has closed below upper band by 25.4%.
Bollinger Bands are 15.7% wider than normal.
The current width of the bands (alone) does not suggest anything conclusive about the future volatility or movement of prices.

Historical Volatility:

50 day Historical Volatility is 16% (desired: greater than 40%).

6/100 day ratio Historical Volatility is 0.88 ( desired: less than 0.50).
Note: PSE is been trading in a very low volume since January 25, indicating that many are still indecisive with regards to the current market behavior.

Trend Direction and Strength:
PSE is still moving sideways to down in a weak trend strength. But overall the current momentum of the market is still going upward.

Support/Resistance Lines:

Support: 2960
Resistance: 3000

 Figure 2. Other technical indicators

RSI:

The RSI shows overbought (above 70) and oversold (below 30) areas.  The current value of the RSI is 52.30.  This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area.  The last signal was a buy 7 period(s) ago.

Stochastic:

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20).  The Stochastic Oscillator is 71.66.  This is not an overbought or oversold reading.  It just triggered the sell signal.

MACD:

Currently the MACD is bullish since it is trading above its signal line. The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line.  The last signal was a buy  5 period(s) ago.

Conclusion:
Since stochastic just triggered the sell signal. I'm expecting PSE to consolidate/correct to the 2960 or 2920 level of  Fibonacci support line in the near term. Critical support line to watch out here is the 2800 Fibonacci support line. Breaking these support line will indicate a continuation for the downward movement of the PSE. Worse case scenario, we may be able to see it going down to as low as the 2550 or even the 2350 Fibonacci support line if the 2800 support line is broken. For PSE to be more bullish, it has to break and stay above the current resistance line at 3000.

Right now I'm kinda cautious to the current movement of the market for the latest upward thrust in price is not supported by a huge volume going up. Another thing that I'm kinda cautious here is that the RSI is already at the overbought level of a down trending market. Elliot wave analysis also somewhat indicates that there is a possibility that the upward movement of the PSE, we have seen lately was just the wave b. If these is correct then a downward wave c is still expected to come.. 

Right now the only sector which is good to buy some stocks is the holdings sector. These is the only sector right now showing a bullish price chart.