Figure 1: PSE Index Chart
The index continued to correct, breaking its recent up trendline last week. Luckily it was able to find some support around 6500, forming a bullish reversal candlestick pattern (hammer) last Thursday. I am expecting the index to pullback towards 7000 level, for it is now at oversold territory. The only drawback is that momentum remains to be strongly bias downward. I need to see a slowdown in this downward momentum before we can expect a possible resumption of the upward trend.
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