After a long blogging breaking, it’s nice to be back again! Thanks to everyone who sent messages and inquired about the where the market was going. As promised I will continue to still write as much as I can and will try to give you a PSEI update as often as I can this 2016. It was a good blogging break for me as I was able to visit Israel & Jordan, finish my new book and engage in a new business partnership.
So where is the market now? Similar to my update in my Rappler column, nothing much has changed since the middle of 2015. As of this writing the PSEI still remains to be in a downtrend and has stayed in this path since the reversal last year. You can expect this progression to continue until significant resistance levels have been broken. There’s so much variables abroad from what’s happening in China, to oil prices continuing to drop and more funds heading back to the US to get fixed gains that has brought a lot of volatility to our markets.
What are the resistance levels to watch out for?
The PSEI needs to breakout of 6,950 to escape the 10 month downtrend. If you also look a the moving average in the chart above, the biggest resistance that we have right now is at 7,230. The market must breakout from that level to have a full reversal from bearish to bullish. Before that happens you may expect selling to happen as the market tries to approach 6,950 and 7,230. On a fundamental aspect, I believe companies must release earnings that are above expectations to cause more investors to come into the market again and buy. You have to remember with the absence of volume and buyers a market cannot go up with conviction. This is something that we have been lacking for the past few months.
If you are investing in Index Funds and the FMETF
If you are investing on the PSEI and want to come in at the reversal look at the points above as your reference before coming in. As what I always say, don’t look for the bottom but look for strategic areas where you can figure out when selling has subsided.
If you are looking at individual stocks, there are a couple of stocks that have been doing well even when the market was dropping. You may take a look at SMPH, MPI, MWC, JFC, SMC. These stocks just corrected a bit while the market dropped and performed much better than the market as a whole. Your goal is to be selective and find stocks that are bouncing off certain support levels or are still in their uptrends while the market as a whole has been dropping.
I have posted a couple of this charts over twitter for the past months and I will do my best to write more soon also in my website.
I hope this helps you in your trades and I hope that as you progress and go through the motions of investing you use this downtrend as a season for you to grow and build the right skills in trading and invest.
God bless you and may 2016 be your most fruitful year yet! I’m just glad to be back at blogging once again!
I’m excited to share my latest book, Where Should You Invest? This will answer one of the biggest questions on the what, where and when you should invest on. I will also tackle the concept that there are certain investments that work well with others and some investments that don’t work well at a certain investment phases.
This is aimed to help investors have a holistic sense on how they can grow, maximize, and preserve their wealth!(Stock Smarts Book 4 is also coming this year)
To order: http://goo.gl/forms/AaciOAg92H