Figure 1: PSE Index Chart
After carefully analyzing our index, its seems the whole rally recently was just a pullback towards its major trendline resistance. Even though our index is moving sideways to up inside a price channel, its recent momentum upward is decelerating. Adding this to the bearish evening doji star candlestick formation last week will indicate that our market is on its way to a possible correction. There may be a possible retest of this major trendline resistance but upon breakdown of the price channel the projected key target of the correction is either the 61.8%, 100% or the 161.6% fib projections.
Take note also that our index is starting to form the right shoulder of the classical bearish Head and Shoulder Pattern, whose neckline corresponds exactly to the 78.6% fib projection line. Target of the H & S pattern upon breakdown of the neckline is the area around 2834.
Right now I remained cautious of the market and if possible stay out until a clear direction can be established.
No comments:
Post a Comment