For almost a year, Rizal Commercial Banking Corporation or RCB in the Philippine Stock Exchange has been consolidating sideways. I even posted on this last April 12 thinking it was going to march up when it broke out from the descending channel (kindly check here). It did for a bit but apparently just continued moving sideways. In the process, it could have made another area pattern, a 1-year symmetrical triangle.
Based on last Friday’s trading, there could be some buying pressure building up as the stocks broke above its 50, 100 and 200 day moving averages with the MACD trailing the positive territory. The volume traded for the day surged to 2,075,900 when it’s usually less than 1 million for 2 months. If the price further ascends, breaks the triangle’s resistance accompanied by heavy volume, our target price could be set to PHP34.00. I got this by adding the size of the triangle to the possible breakout point. However, there could be some resistances at PHP29.35, PHP30.05 and PHP31.00 along the way.
In the bigger picture, the 1-year symmetrical triangle could actually be the handle of a large cup and handle with the neckline at the PHP31.00. If this 4-year cup and handle pattern breaks out, 50.00 Philippine Peso (PHP) could be our target price. Although, major resistances are found at PHP37.50 and PHP45.40. On the downside, the major support is the 2-year uptrend. If that breaks further, the next could be the triangle’s support.