The first green bar of a rally?

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Daily Notes

The first green bar of the rally (I am currently using the charting application provided by Citiseconline, if your using amibroker it should be the first white candle)

After testing a possible resistance at 3133 (15Jan2010) the PSEi has dramatically and heartbreakingly collapsed.

For the past 14 trading days: 4 trading days registered green/white candles (4/14) the rest is obviously in the red/black.

Two gap downs were formed which would most likely be levels of resistance.

Prior to todays market action the DJIA set the mood to trend upwards.

This may have been the sign investors/traders have looking forward too.

The evidence: a green/white candle with little downward uncertainty. The PSEi opened low and tested highs but still closed significantly higher than its open.
Open:2867
Low: 2867
High:2892
Close: 2884

Is this a sign of a possible rally? Hopefully.

But the volume does not support this opinion since today's volume fails in comparison to the past 14 trading days. A rally would most likely occur if PSEi would form a higher high and higher low tomorrow with volume 4B. For now let us watch and wait for confirmation.

My professor in Finance at UP was wondering why the market falling. I am also asking that question, fundamentally.

But if you look at the chart, on 15Jan2010 the RSI of the PSEi hit 71, signalling an overbought environment. PSEi reacted by falling from 3133 to 2847 (02Feb2010). But upon reaching yesterday's low of 2847 the PSEi's RSI hit 18, signalling an oversold environment; which might also be a reason why we formed the green/white candle we see today that my start the rally.

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