December 10, 2013 marked another massive decline in the PSE, as its headline index, the PSEi, dropped by 2.04% in a single day of trading.
Looking at the technicals, the PSEi is still in a downtrend which may lead it to try to test the support of 5,785. This area looks like a strong support area, but if our market continues to fall we may see the PSEi drop to around 5,472 – 5,620. The market already looks oversold as foreigners continue to sell, as they try to anticipate a FED tapering announcement which may be looming soon. The difference today is that locals joined the selling spree.
For those that are trading, it would be good to wait until a clear reversal is eminent. While for those investing, the stocks that you have been eying have become cheaper once again. The past few days have all been about sentiment rather than value. Our fundamentals are great but the sentiment is down. You may go with the flow and stay away from the market while things are down or you may pick up value stocks that have been battered. At the end of the day, plan your trade and trade your plan. Nothing beats a trader that’s prepared for battle each day.
I speak wisdom for everyone doing trades this week. I do hope trades are based on logic and discernment than emotion and panic. If there is anyway I could help you further do let me know as we are all in this race towards financial freedom together!
God bless you!
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