Changing My Outlook on PSEi

 Ending 2020, I had a very bearish view on PSEi. I was expecting that the index would even fall below the 4,000 low of March 2020. But after reviewing my chart, I had a change of mind. Perhaps, this change is secondarily for technical reason and primarily due to the change in market sentiment. 

As you can see in this 6-month chart, it seems that cycle Wave II had already been completed last March 2020 and PSEi now is forming Cycle Wave III. By the way, I failed to include in my chart that the January 2018 high @ 9,000 where Wave 5 ended is part of Cycle Wave I. Cycle Wave II ran for 27 months from January 2018 to March 2020. And so if this analysis is correct, we are now witnessing the early stage in the formation of Cycle Wave III. 

In this weekly chart, you will observe three things:

• Support @ 6,200 area
• Resistance 1 @ 7,400 area, and
• Resistance 2 @ 8,400 area.

As you can see in this monthly chart, the current trend is shifting from a downtrend to an uptrend. For this analysis to be valid, PSEi must break that January 2021 high @ 7,468. 

This weekly chart shows that the rally from March 2020 to January 2021 retraced only down to 38.2% Fibonacci close to 6,100 area. If this analysis is correct, we are now witnessing the formation of Primary Wave 3 within the Cycle Wave III. 

As for the daily chart, we can see the immediate support @ 38.2% Fibonacci @ 6,674. Checking the Fibonacci indicator on the left side, you will observe that the resistance for PSEi is at 61.8% Fibonacci @ 6,920, but the actual resistance is at 7,000 area. Learning Fibonacci not only in terms of retracement, but also in terms of setting target for taking profit, the indicator though not exact, it is at least close to the actual resistance. Checking the Fibonacci indicator on the right side, you will see that PSEi's actual retracement is @ 23.6% Fibonacci exactly @ 6,798. That's impressive! If this support will be respected, then we will see that after three days of pullback, the bulls are anticipating the resumption of an uptrend.

What is the meaning of these charts in you portfolio? This to me means that I should devote greater amount of my buying power more in trading index stocks than the penny and speculative ones. If you are not an active trader, then just park your money with solid issues such as $ALI, $DNL, $DMC, and $MEG. You can also consider $MBT, $AP, $JFC, $MONDE, and $MPI. Both the technical and fundamental analysts of COL Financial are very positive on these stocks.     

12 Most Requested Stocks

Just finished attending a webinar hosted by COL Financial. What I like the most in this webinar is the discussion on 12 most requested stocks. The reason I like it is due to the way these stocks are evaluated both from the technical and fundamental perspectives. Six stocks that are included in the most requested stocks are part of PSEi: MEG, ALI, MBT, AP, JFC, and MPI. The remaining six are popular in the market, which include ACEN, DITO, MM, DDMPR, MONDE, and APL. During the Q & A, DNL was added that both the technical and the fundamental analysts would consider it in their top three stocks. 

Both analysts are positive on the following stocks: ALI, MBT, AP, JFC, MONDE, MPI, and DNL. On the other hand, they don't like DITO, MM, and APL. The technical analyst is positive on both ACEN and DDMPR, but the fundamental analyst doesn't like them. As for MEG, basing on its current chart, the technical analyst is negative, but the fundamental analyst considers it very attractive. 

With all of these insights, I am updating my Watch List: ALI, DNL, DITO, MM, APL, and MEG. I agree with the insights of the analysts concerning ALI and DNL. As for DITO, MM, and APL, considering the warning of those experts, I think, I will still trade them, but I will be extra cautious. As for MEG, it appears to me that fundamentally, the stock is solid, but technically, I need to wait for the right time to buy.