The PSE Index – 8 Aug. 2011
The PSE index did a Monday bloodletting as it lost 106.31 points or 2.4% closing at 4,331.24, Aug. 8, 2011. The rest of the Asian markets were all in the red as a knee-jerk reaction from the US downgrade by Standard & Poors. Nikkei225 and Hang Seng lost 1.87% and 4.04% respectively, Shanghai -3.44% while Straits Times Index lost 3.7%.
The index top losers were RLC, AGI, AEV, URC and MBT. Among notable top gainers were PWR, WIN, EVER and ZHI, which is also the most active stock of the day.
The PSE Index Chart
As we can see on the PSE index chart, technically, we’re still on an uptrend since the ichimoku cloud is still below the candlesticks. It seems like this is only a 60% fibonacci retracement from our previous highs. As long as the index doesn’t go below the kumo, I’m confident that we can maintain the uptrend. Furthermore, the RSI is already at 31%, near oversold level, time for traders and investors to buy back.
Let the US and European countries solve their own economic issues and worry their self-made problems, let’s just focus on our Philippine economy and invest for the long term.
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Large Cap Stocks on the Sidelines
Now that the blue chips are experiencing a sell-off, I think most of the traders will play the 2nd and 3rd liner stocks, mining companies were also hit badly except Manila Mining, MA, who remained flat. I think the penny stocks will re-emerge.
I’m seeing East Asia, PWR, maintaining a 1.91 support, which formed a doji candlestick pattern, a battle between the bulls and the bears, but considering an 11.11% close, it might continue to gain back its loyalists.
Zeus Holdings,ZHI, traded a record volume of 615.7M shares on Monday but it closed a modest gain of 1.61% or P1.26/share, a resistance at 1.35 needs to be taken out before it resumes up or it might start to correct on Tuesday.
Basic Energy, BSC, remained strong at 0.3350 but experienced a sell-off before the end of the bell, closing at 0.3150. If 0.31 breaks, then prepare to cut.
Although this is not a penny stock, Cebu Air (CEB), owner of Cebu Pacific, seems a good bargain at P80.00, with an immediate target price of P92-96, but of course, it’s best if you can get it at P77 apiece.
Gold is on a new record high, now at $1,717 or $1,700 level, as Goldman Sachs forecasts gold to hit $1,860 next year, 2012, everyone is on a gold rush!
US Stocks Avalanche – 8 Aug, 2011
As of this writing, the Dow Jones Industrial Average lost a whopping 634 points or 5.5%, the biggest drop since 2008! This is only the beginning of the week, expect more woes in the coming days.
Good luck to us all!
illustrations courtesy of 123rf.com
Charting software by Chartnexus.com