Phisix Monthly Chart

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The Phisix monthly chart - updated 3/1/2010

Bear-Trap Indicates an Inability to Drop

charts are courtesy of Metastock

The PSEi gave the market quite a scare early this month as prices already dropped to as low as 2787. Miraculously though, prices was not only able to close the month higher than last month's close, it was even able to close the month with bullish hammer pattern. This is a good sign for the bulls as it indicates that there is an inability for the market to drop. Will this lead to a higher high in the market? I believe so. What happened to the market is that it's as if prices merely corrected down to form a higher low and is now poised to continue trending up. The drop has "released" the market from being overbought and could now be poised for another run. Potentially, prices may climb to as high as 3350, which is the 75% Fibonacci retracement is located. What can make me bearish once again? Well, if prices suddenly drop back down below 2787, that would certainly erase whatever bullish implication that the market did this month. From the way it behaved this month though, chances of that happening is very, very slim, in my opinion. Worst-case, we'll move sideways again this March.