Hello beautiful people! Let’s get back the to the chart of the Philippine Stock Exchange Index (PSEi). The last time I posted on this was last month (kindly see it here) and back then, the ascending channel was still intact (indicated by the yellow parallel lines). Two weeks ago however, the index cleared out the ascending channel’s resistance and surged higher. Then, in just six trading days, it moved past above the 3667.74, 3770.18 and the 3896.74 resistances. I actually just noticed now the PSEi has already doubled its value in less than two years after coming from the bear market. Also, a few minutes ago, the US reported a decline in unemployment claims, from 472k previously to 451k now which brings the US market sentiments towards the positive side. This could be good for the global economy including the Philippine Stock Exchange as the US economy is still a benchmark for the global market.
Technically speaking, what is ahead of the Philippine Stock Exchange Index? Like I mentioned earlier, the PSEi has breached the 3,896.74 resistance (this would still be the all-time high if not for today’s bullish session) and could head higher as there are no more resistances left. However, there could still be some selling pressure at the 4,000.00 psychological level which I personally consider a resistance. If that gets taken out, the PSEi could just shoot all the way up again until it finds some resistance around 4,100. In my opinion, the break above the 3,896.74 resistance isn’t convincing as there is no significant surge in the volume. The index could slightly decline before it heads back on track but who knows right. There are many cases on breakouts without much volume but still went all the way up. Aside from that, the volume is just a secondary indicator next to the price action (price is still king). Anyway, on the pessimist’s point of view, if the index suddenly drops, the former resistances could act as supports. If not, the 18-month uptrend could be the strongest support among them all and like I always mention, as long as the uptrend remains intact, the northbound direction of this index will most likely continue. Enjoy the long weekend guys, let’s see what happens on Monday. Cheers!