PSE Index Chart Analysis for the Week (August 14 - August 20, 2011)

Figure 1: PSE Index Chart

Last week, I mentioned that the blue trendline is the critical point to watch. Our take was right, the trendline was broken and the index drop right at our initial estimated target of 4132. From that point it tried to recover and was successful in closing all the previous gaps.

For the coming week, I remain cautious of the market because the 4358 resistance is so strong and I don't think the index is ready to break it for now. Even though the index is near oversold in my indicator, its momentum remain strongly headed downward. Support to watch is the 4233. The markets momentum must at least shift upward else 4233 will be broken and the index will drop to the next major support at 4132.