Figure 1: PSE Price Chart
Last week our index has performed exceptionally well by going up for the straight 7 days. Right now it has pulled back to the neckline of the head and shoulder pattern. This neckline or the 200 MA is acting right now as a major resistance which needs to be broken. The RSI is also encountering some heavy resistance as well. IMHO, the index must first break its down trendline and for RSI to go above 60 for me to consider this current rally of our index as a reversal and not just a pull back. In case our market will correct I am looking at the gap around 3900 as a possible target for the correction.
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