PSEI – Is this a Correction or a Change in Trend Direction?

PSEI, Is this a Correction or a Change in Trend Direction?

When I woke up this morning and opened my laptop, I received PM’s asking me about my take on the PSEi based on what happened yesterday and they want me to present my Technical Analysis The Responsible Trader’s way.

Actually, at this point, I do not want to post any Chart or analysis yet because I want to finish posting all the materials about my Advocacy and then later on post trading lessons  so that my readers and I will have a common knowledge base to better understand each other.

Anyway, due to insistent public demand, I am sharing this with you.  This is just my personal opinion.

PSEi 20141013_A

TECHNICAL ANALYSIS – PSEi – As of October 13, 2014

POSITIVE

  1. Very strong uptrendline tested several times.
  2. Defied potential head and shoulders pattern three times during the past months.
  3. RSI approaching oversold levels.
  4. Has not broken the 38.2% Fibonacci support level at 6760.

NOTE:  When I say Resistance or Support let us think of them as areas, not specific pin points. I only use the Fibonacci tool when I see a Trendline break to determine probable retracement levels. I use Fibonacci Extension when I see a Breakout to determine probable areas of resistance and profit taking levels. My system is based on the Ninja KISS (Keep it Simple and Sustainable)

NEGATIVE

  1. Trendline break.
  2. Bearish divergences on MACD and RSI foretold possible change in trend direction.
  3. MACD on Dead Cross (MACD crossed below signal line). Histogram is now below zero line and histogram is expanding.
  4. Worrisome Marubozu (Big Red Candle) yesterday.

Please analyze carefully and decide for yourself.  You are the only person who has your best interest in mind.

As a Responsible Trader in accordance with the Creed, I will never tell when to BUY, HOLD, or SELL.  This is the way I will always present my analysis whether on PSEI and the other Sectors or for any specific stock.

This is The Responsible Trader’s way to differentiate ourselves from those who tell when they are ready to sell.

Good luck on your trades today.

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