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The Phisix weekly chart
updated every Mondays, last update -
8/25/2008
Bearish Evening Star Pattern Confirms Peak
at 2778
charts are courtesy of Metastock
The PSEi formed a black candle
last week, thus, completing a bearishly-looking evening star pattern.
Does this mean that the market is going to drop back down towards its
previous low at 2289? While that certainly is possible, I don't think
that that will easily happen without even a fight from the bulls. Those
who missed the upswing of the market in the last couple of weeks will
probably be looking to buy into the market if prices drop back down. You
can see in the chart above the market's previous resistance line as
highlighted by the blue dotted upper trendline. If the market is really
strong, prices should be able to bounce off this resistance line and
convert the line into an area of support. That level is currently at the
2500 level. If the market will be able to do that, then, prices might
make another run-up towards its previous high at 2778. For the meantime,
I would expect bears to continue to threaten the bulls by continuing to
drop lower. If, on the other hand, the market continues to drop lower
than 2500, I'm afraid the market may continue trending down and
eventually dive towards the psychological 2000 level. A more bullish and
unexpected scenario is for the market to already hold above current
levels and start climbing back towards the 2778 level. If that happens,
that would mean that the market is indeed very strong and prices may
actually climb up towards the 3000 level soon. I wouldn't want to make a
prediction at this point because the market is really quite ambiguous at
this stage, which is why I am simply pointing out the possible scenarios
that might happen. The long-term trend of the market is still up, the
medium-term trend is still down, the short-term trend is up, while the
very short-term trend of the market is currently down. Obviously, with
this kind of an atmosphere, prices will most likely consolidate within a
range for now as half of population are probably bullish and the other
half are probably bearish.
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