Below is the year end chart of PSEi. Check out my previous post, I mentioned there that price is forming almost equal highs and higher lows... Possibly an ascending triangle. Ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern and also indicate accumulation. A breakout from that upper horizontal resistance line will test 4400 level and possibly to go the triangles target price which is at 4564.
Inside the Triangle there is a Harmonic pattern forming... A potential Bearish Bat and Bearish Crab. Price is now at the potential reversal zone of the Bearish Bat (D1). If it continues to move up it will negate the Bat pattern and move up to the target price or potential reversal zone of the Crab pattern (D2).
If price will break out from the horizontal resistance line, we hope that RSI (14) also breaks out from 66.50 resistance to confirm that momentum upwards is valid.
Price is also now testing the ascending support line and we see a 2 candlestick pattern, a Bullish Engulfing pattern... We see a higher volume on the last candlestick compared to the previous day which gives us a positive sign that reversal is going to happen... The reversal needs further confirmation. This confirmation may be in the form of a white/green/blue candlestick, a large gap up or a higher close on the third day.
That's what the chart is telling me... But what about the bearish side of PSEi? A break down from the the triangle or at the 2 horizontal support (dotted gray) will bring down the price to 4200 level.
Thanks for visiting my blog and reading my analysis. Feel free to provide comment/s on this analysis. God Bless!
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