PSE Index Chart Analysis for the Week (February 6 to 12, 2011)

Figure 1: PSE Index Chart

Last weeks market was an overkill a lot of traders and investors have taken profits due to fear and panic selling due to the turmoil in Egypt. Hope you guys take the advantage to add to your core shares. Because this coming week my chart is telling me a possible upward move by our market.

Here's what the chart is telling me right now:
1. There is a bullish divergence from our RSI indicator which greatly indicates a possible upward move by our market.
2. The index was able to form an AB = CD pattern with possible reversal area around 3837 and 3684 of our chart.
3. Current market is also being supported right now by the major support line of 2007 high (see chart below).
4. The market has some room to move up this week as indicated by our indicator not at the overbought area. This was possible due to the market correction last week.

Figure 2: PSE major support area