The PSEi was trading on a broad rectangle (somewhat) for quite some time now (since April of this year until now) with 3,100 area as support and with 3,330 to 3,360 as resistances. The first trough within the rectangle (around mid-April) did a bounce even prior to support areas (both previous-highs-now-turned-support (3,130) and the 50-day moving average (maroon line)). However, the second and the third troughs (both in May) pierced through the above supports (both the 3,130 and the 50-day MA), but found some buyers towards the 100-day MA (green line). This was bearish because selling pressures were still prevalent even at previous supports so it needed to correct some more and find more buyers at lower prices, which was incidentally the 100-day MA.
But in June, as market tried to correct again, we found supports now raised higher from 100-day to back to 50-day MA again as you can see in the picture above. This was a higher-low, which is a bullish signal. That means, more buyers are willing to take more risks at higher prices than before thinking that the market's correction is already enough even at that point. Could this propel us above the resistances? Both MACD and RSI confirms a higher-low. Could our market be trending again pretty soon? I think we will pretty soon. I have to admit that our market seems to be very resilient compared to other markets. Let's see next week!
If we do breakout soon, we could see our market hit possibly 3,500 to 3,600. If not, then possibly we'll consolidate some more within the range of 3,240 to 3,360 to gain a better and stronger base. Let's watch out for foreign activity.
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