Another good day for the Philippine Stock Exchange fellows. During awesome runs like these, it’s the best to take advantage of the opportunities the market gives. Many stocks especially blue chips rise but remember to lock up your profits and not be greedy.
Last January, I posted on Megaworld Corporation or MEG in the Philippine Stock Exchange and mentioned that there was a head and shoulders pattern that was bound to break down and it did shortly (kindly check here). I also mentioned that the target price for its descend could be 1.86 Philippine Peso. With the market’s current condition and today’s 7.14% gain to close the Megaworld stocks at PHP2.25, I highly doubt MEG is going anywhere close to PHP1.86 soon.
Earlier today, Megaworld broke out from a 2-month consolidation which apparently looks like a rectangle, symmetrical triangle or even an inverted head and shoulders pattern. Regardless of what pattern it may be, it has broken above the PHP2.23 resistance and its 5-month downtrend. However, MEG closed right at the neckline of the former head and shoulders which serves as a resistance along with the 100-day moving average. With the MACD leaning towards the positive territory and the sudden surge in buying pressure, MEG’s move up could further continue tomorrow. If it does, the next resistance the bulls could encounter is PHP2.38 then off to the PHP2.60 hurdle. On the downside, PHP1.96-2.00 is the level of support I’m looking into in a way that when the price goes below that level, I’d cut my position.