The PSEi challenges and fails to break the 3,450 resistance level

Market Euphoria and momentum had the market open strongly and the PSEi (Philippine Stock Exchange Index) tested the 3,450 resistance. The Dow Jones Industrial Average (DJIA) continued its rise as it advanced 37.06 points to close at 13,383.84.

PSEi previous close - 3408.73 (May 15, 2007)

time-----------change------------PSEi
9:31----------up 10.26
9:32-------------10.65
9:33-------------11.87
9:34-------------13.24
9:35-------------14.09

After just five minutes, the lower range of the resistance level (3,425 - 3,450) is breached.

9:36-------------21.04---------3429.77
9:37-------------21.71
9:38-------------22.55
9:40-------------24.19
9:41-------------26.08
9:42-------------27.71
9:45-------------27.83
9:46-------------32.83
9:47-------------33.48
9:50-------------35.82
9:51-------------40.93
9:52-------------43.00--------3451.73 (the day's high)

Within less than half an hour, the 3,450 level is tested. As mentioned, a steep rise is very susceptible to a deep correction. With prices going up too fast too soon, investors are likely to take profits at once. And sometimes selling gets a bit overdone and could lead to panic selling thereby gains are easily wiped out and the sentiment/trend is reversed. Today's trade is a good example.

9:53------------35.91
9:55------------31.41
9:57------------29.68
10:01-----------29.85
10:07-----------28.49
10:10-----------25.40
10:11-----------22.61
10:14-----------22.07
10:18-----------20.72
10:23-----------20.48
10:24-----------20.08
10:27-----------19.84
10:29-----------19.55
10:30-----------15.98
10:31-----------14.37-------------3423.10

The market tries to find support at the 3,425 level and rebounds a bit.

10:32-----------17.96
10:36-----------18.16
10:37-----------18.41
10:41-----------20.05

The market failed to reach higher levels. The market became tentative in the next few minutes.

10:44----------15.54
10:49----------19.47
10:52----------17.81
11:01----------14.23-------------3422.07

It became evident that the support at 3,425 won't hold. Sentiment has now reversed and selling pressure grew stronger.

11:05---------13.34
11:09---------12.37
11:12---------11.85
11:15---------11.69
11:24----------7.86
11;27----------6.97
11:29----------4.11
11:33----------3.59
11:34-----down 0.44

With less than 30 minutes to go and the market completely giving back its gains, trading became volatile.

11:35-------up 3.00
11:37----------5.52
11:41----------1.28
11:43----------7.08
11:46----------2.68
11:50----------0.53
11:52----------4.67
11:57----------3.58
11:59------down 2.07--------3406.66 (the day's low)
12:01--------up 0.47--------3409.20
Market Close.

Advancers 58
Decliners 59

Value turnover PhP 6.052 bn
Cross transactions PhP 2.552 bn

Sectoral Indices
Financial + 0.82%
Property + 0.77%
M-O + 0.19%
Holdings - 0.28%
Industrial -0.35%
Services -0.57%

The market became very tentative. Advancers trailed decliners and sectoral indices closed mixed. The market is likely to consolidate and test the 3,400 level at this point. A break may lead to a deeper correction. If a strong support is seen at this level, the next run up will have a better chance of being sustained.



Closing Prices of select stocks - mAY 16, 2007
ABA - PhP 0.012
ALI - PhP 18.00
AR - PhP 0.012
DGTL - PhP 1.66
EIB - PhP 0.54
GO - PhP 0.27
GOB - PhP 0.27
LOTO - PhP 15.50
MPI - PhP 4.60
NRCP - PhP 4.30
SUN - no trade
V - PhP 1.76
WEB - PhP 0.049


Some more data from Bloomberg TV (May 16, 2007 - 4:30 pm Mla time)
Gold $670.68 / ounce
Oil $62.96
PhP 46.93 vs US$1.00


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