Wednesday, November 14, 2007
PSEi - hammer?
PSEi = 3599.49 (-0.5%)
PSEi formed what seems to be a hammer, but can also look like a doji candle. There is a uncertainty in heading down which can be measured by the difference between the open and the low of the trading day - graphically it is the bottom wick of the candle. If this is a reversal pattern we will likely have a higher low and higher high this coming trading day. This might be a start of a rally to find the resistance of the downtrend.
PSEi is getting neat the 38.2% Fibonacci retracement level. If PSEi bounces from this level it can be considered as a healthy retracement of the previous uptrend.
DJIA was bullish with last nights trading, gaining 2.46%. It might also be the start of their rally to find the resistance of the downtrend. This can be considered as a bullish sign.
A bomb blast that injured several congressmen and killed at least one person was the focus of the news last night. This can be considered as a bearish sign.
With this mixed situation hanging over the market, it will be interesting to find out how the market will react. One thing is for certain the chart will reflect everything and as the tenet of technicians reiterates: Price discounts everything!
Good luck to all traders!
Support: 3539, 130 and 65MA
Resistance: 3667-3692 (previous gap down), 32MA