PSE Index Chart Analysis for the Week (February 20 to 26, 2011)

Figure 1: PSE Index Chart

 

Last week's market performance offered us a great opportunity to gain some profits. For this coming week, there will be a high probability that our market will correct/consolidate. Some of the market weakness shown by the chart that may lead to this correction is the overbought condition of the market, and the bearish candlestick lasts Friday after hitting and encountering some resistance on the 20 MA and the resistance on the 10/8/2007 high.The target of the correction for me will be around 3800. This was the previous trendline resistance (violet line) or the 200 MA (green MA).                     

If the market breaks the 10/8/2007 resistance, the biggest test for our market is if it can break above its major trendline resistance (diagonal red line).