Escolar Documentos
Profissional Documentos
Cultura Documentos
MARKET OVERVIEW
Global markets have continued to reflect positive trend swings
There is however the lingering problem of being overbought - expanding the threat level of corrective risk if not greater volatility
But as short term up trends still tow the line, up trending strategies remain so long as key support stops are not broken
GLOBAL REVIEW
US: RANGE BOUND CHANNEL CONTINUES US SP500 continues with its channeled advance but nears its major resistance; decision up ahead
US SP500
SP500 Review Is proceeding to trade within an advancing channel as upward momentum still exists
Sup: 1,460 1,400 Res: 1,550 1,600
The upwards cascade may drive a trading range between 1,550-1,600 and 1,460 -1,400
However overbought levels are near and major highs last seen in 2007 & 2000 (at 1,576) may present some short term problems
US: STOCKS AND BONDS US Bonds are reacting from long term trend highs; could this motivate the SP500 above major tops
10-Yr Bond
SP500
CROWD SENTIMENT VIX confirms incidence of Over Bullish sentiment and Over Complacency = prologues to temporary tops
VOLATILITY INDEX (VIX)
OBSERVATIONS
The SP500 is nearing a major decision point With Overbought threats and major Resistance nearby - it does call for greater degree of caution and readiness (just in case short term support structures break) If major resistance can break, coupled with more reactive substance in bonds, it could effect an extension of the equity advance
Europe and China proceed to rebound but may face a heavy obstacle into their range highs
Dow Jones EUROPE INDEX CHINA
Even if rates pick up, it will only jolt the market temporarily
A Recent overbought Euro corrects within a wide band; while the side-pinned US Dollar tries to stage a foothold in support
EURO INDEX US DOLLAR INDEX
COMMODITIES: METALS SHOW VARIANCE Industrial Metals show strength in line with the global recovery; Precious Metals sag for now
COPPER GOLD
SILVER
COMMODITIES: ENERGY PRICES RANGED Oil tests first resistance at $99 then $105; US Gas tests major highs; Natural Gas reacts off its rally
OIL US GASOLINE
NATURAL GAS
OBSERVATIONS
Headwinds may exist if major resistance calls upon a pullback in Europe and China Although the Low I-Rate environment should keep money flows open for the longer term for equities This longer term bullish view is favored by the continuing recovery in Industrial metals The Euro & Dollar may be treading on a short term inflection point with a 60% chance of a resistance break scenario into the greenback as suggested by the pullback in precious metals
(this could present a short term threat to US Equities)
PSEi continues its bullish run with high momentum overshadowing high RSI (Overbought) levels
PHILIPPINES - PSEI
RSI* 77 84 81
ADX** 54 51 41
*RSI levels above 70 are considered Overbought; 80+ are more extreme zones that can trigger reactions ** ADX levels (taken from DMI indicator) greater than 30+ indicate high momentum trends that can nurture extended overbought levels
FOCUS PHILIPPINES:
PSEi shows an aggressive channel & stands above short term support; these support zones should hold stops
PHILIPPINES - PSEI
PSEi Aggressive swing induces the use of sharper averages for support stops Watch short term support placed by its 8-day (6,478) or 16-day (6,385) Moving Averages Short term resistance estimated at 6,650 then the psychological 7,000 Wider corrections may target the 32 to 65-day Mov Averages
Bottom
PSEi
Today
Bottom
Peso breached the P41.00 level and may scope the lower end of its channels at P40.00- P39.40
PHILIPPINES - PESO
Sup: 40.35 40.00 Res: 41.25 41.95
OBSERVATIONS
PSEi continues with its Up Trend and has shown no support lapse as of yet
The Peso strength mirrors (and confirms) the country's progressive path We may be coming towards a short term bump (chance of rain) as major resistance zones from a number of markets & Overbought levels may need to draw out some reactive fixing Until such time however (signed on by key breaks into short term averages), aggressive trade tactics are still warranted protected by short term stop assignments
TRADING STRATEGY
(1)Identify strong durable picks High ADX >30 Rebounds from Prices supported above 16-day or 32-day Moving Averages (MAs) Positive MACD values Preferably with RSI below 80%
Buy Window
TRADING STRATEGY
Buy Window
Buy Window
TRADING STRATEGY
(2)Always utilize protective stops Adjust profit take stops preferably to 8, 16, or 32day MAs (depending on the acceleration seen) Qualify your buy-backs your issue must show your aggressive parameters again if not look for another option
-These issues improved their technical condition for the week (moving to the left of their column category on the Tech Map) -These issues regressed on their technical condition for the week (moving to the right of their column category on the Tech Map) -These issues carried the same technical condition for the week (standing on the same column category on the Tech Map)
Missing Parameter
Disclaimer: All opinions and estimates constitute the judgment of COL s Equity Research Dept as of the date of the report and are subject to change without notice. The report is for informational purposes only and is not intended as an offer or solicitation for purchase or sale of a secur ity.
SUMMARY
Philippine Up Trends proceed with support intact Overstretched conditions or/and possible short term resistance bumps may incite some profit taking incidents but these reactive bouts should not force on a major trend reversal
As Macro trends do stay prospective - reactions to support will present better buy windows Aggressive markets will warrant Aggressive trades all justified by the use of protective stops and strong filtering mechanisms to curb any potential risk
It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires ten times as much skill to keep it. Ralph Waldo Emerson
Thank You!
JUAN G. BARREDO CHIEF TECHNICAL ANALYST JUANIS.BARREDO@COLFINANCIAL.COM