Troubles in the international market, particularly in the Middle East and Japan, have been weighing heavily on the Philippine equities market. Hence, you might ask when is it best to jump back in especially at these times of uncertainties.
The Philippine Stock Exchange Composite Index or PSEi has been trading within a descending channel since November last you. After peaking at 4,413.42 back in November 5, 2010, the index had steadily fallen to a low of 3,705.18 on February 28 this year. Notice from the chart above that the only support that has been keeping the entire phisix afloat was its 200-day moving average. With the index still respecting this major long-term support, the general view for the market remains upbeat despite the sell-offs that we have been seeing here and there. However, selling pressure should still be expected given its 5-month downtrend.
Recently, the index has rebounded fairly following last week’s flat trading. Note, though, that there are key resistances ahead that are needed to be taken out before it could resume its uptrend. Ultimately, it needs to clear the resistance of the descending channel which coincides with this month’s high at 3,959.94 and the 4,000.00 psychological price level to do so.
So to answer the question of when is it best for one to buy back in the market, from a technical analysis point of view, I would say that it is safer to enter when the PSEi moves above 4,000.00 but that’s just me.