Market breaks down and tests the 3,400 support - May 30, 2007

The DJIA was up 14.06 points and ended up at 13521.34 after the Memorial Day weekend break. The local equities market started listlessly and even tried to go higher.

PSEi previous close - 3452.62 (May 29, 2007)

time---------------change-----------------PSEi
9:31-------------up 1.54
9:32-----------down 0.36
9:33-------------up 1.20
9:36----------------2.36
9:38----------------5.98------------------3458.60 (day's high)

After the market failed to gain a strong upward momentum just like the past couple of day's, it sputtered and started falling.

9:43-------------up 2.81
9:51----------------1.38

When the market fell through the immediate support at 3,450, the drop accelerated

9:53----------down 3.56-------------------3449.06
9:54----------------6.88
10:00--------------11.69
10:01--------------17.38-------------------3435.24

At this point, the next target was to test the support at 3,420.

10:41----------------------------PhP 46.232 vs $1.00
10:45--------down 20.60
10:49--------------26.62
10:54--------------28.25
11:06--------------30.35--------------------3422.27

The 3,420 support is tested.

11:12--------down 34.19--------------------3418.43
11:22--------------34.50

When it was evident that the support level won't hold, another selling spurt ensued in the final half hour of trading.

11:28--------down 36.54
11:30--------------36.76
11:32--------------39.68
11:36--------------41.55
11:39--------------42.33
11:41--------------46.50--------------------3406.12

Initial test of the 3,400 level.

11:45--------down 43.23
11:47--------------36.25---------------------3416.37

Another round of selling in the final ten minutes had the market falling.

11:50--------down 42.37
11:53--------------44.87
11:54--------------46.05
11:56--------------48.88
11:57--------------53.75---------------------3398.87

The key support at 3,400 is broken and the market then touched its day's low

11:58---------------58.01--------------------3394.61 (the day' low)
11:59---------------55.55
12:01---------------54.07--------------------3398.55 (-1.57%)
Market Close.

Advancers 23
Decliners 96

Value turnover PhP 5.113 bn
Cross transactions PhP 1.955 bn

Sector indices were down across-the-board.
M-O -3.29%
Services - 2.31%
Holdings -1.46%
Property -1.28%
Industrials -1.07%
Financials -0.59%


Market momentum turned around as the PSEi broke several support levels today. A bounce is possible after a large sudden drop; but the 3,400 support must hold immediately to calm jittery investors. The second and third liner stocks which were the darling of market punters the past day's also suffered deep and sudden drops.
If the downward momentum continues, the chart gap opening at the 3364-3381 may be targetted.


Closing prices of select stocks - May 30, 2007
ABA - PhP 0.013
ALI - PhP 15.00
AR - PhP 0.012
DGTL - PhP 1.56
EIB - PhP 0.54
LOTO - PhP 16.25
MPI - PhP 4.35
NRCP - PhP 4.25
SUN - PhP 0.70
V - PhP 1.66
WEB - PhP 0.049




Just heard on Bloomberg TV that the Shanghai market is down today by 7.00% (after going up nearly 140% the past year). The Shanghai B index is down by 9.0%. China has just increased the tax on stock market transactions in order to stem the explosive boom in the market. A growing concern of a possible burst of the equities bubble in China has been sounded off earlier by former US Fed chairman Alan Greenspan and HongKong business mogul Li Ka Shing. Almost 300,000 new stock market investors has been recorded daily in China ( this is the 4th generation of investors and they are prone to sell at once with any downturns). It is estimated that there are now 21 million (more than the population of Taiwan) stock market investors in the Chinese stock market.

Most Asian and European equities markets are down.