If any of you guys missed the recent run-up in the market particularly in the property stocks, don’t fret. You see, there are a lot of technically sound issues nowadays. An example of which is the Yunchengco-led EEI Corporation or simply EEI in the Philippine Stock Exchange.
EEI has been showing signs of a possible bullish reversal since it has been bottoming into an inverted head and shoulders pattern for about 2 and a half months now. Notice in the chart above that the right shoulder is almost completed. Hence, if EEI is able to move past the formation’s neckline at PHP3.80, it then could aim for its upside target of PHP 4.30. EEI’s shares, however, has been trading really thin (no volume). For a valid breakout, therefore, to occur, a move past the PHP 3.80 resistance should then be supported by a spike in volume. Otherwise, you might get whipsawed. Say you’re able to buy on breakout at PHP 3.85, given the computed upside target, you could potentially have a return of about 11.68%.