Things appear to be a little bit more gloomy for the Philippine Stock Exchange Index or the PSEi in the near term at least from a technical perspective.
As you can see from its daily chart above, the PSEi or the PCOMP has already broken down from a small head and shoulders pattern. Now after dropping to a low of 3,715.01 last September 26, 2011, the index managed to rally a bit. Still, the index could rally some more in the days or weeks to come until it sees some resistance at the pattern’s neckline. interestingly, the neckline happens to fall in line also with the 50% Fibonacci retracement level from the index’s peak just above 4,500 to its recent low. Given this, some selling pressure could indeed be met once the index reaches the said level. A failure, therefore, to move past 4,150 could send it back down to its recent low at 3,715.01.
So if its me, I will lighten or even consider selling all of my positions once the PCOMP climbs back to around 4,100.
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