We are just a few days away before the 2016 presidential elections. Amidst all of the political hype, we as market traders and investors should be focused more than even on how markets would move in reaction to all the uncertainty that is thrown around. I personally am a trend follower and one of my biggest goals is just to stick to what I know best and to follow what the charts are telling me. For this post, I will be sharing where the PSEi is and where it could go based on the charts. This will be useful for people who are into equity funds, ETFs, or people who would just want to have a sense where the market is going. As what I always say in my talks, it’s not our goal to predict where the market is headed but merely create risk and reward scenarios based on how the market is moving.
I’ll be setting up a live training session here in Manila this June 4 and 11. For our Manila seminar, we will be having 4 action packed modules, For the 1st session, I will talk about how you can select amazing stocks (Fundamental Analysis) and for the other 3 sessions I will share on how you can find the best time to buy and sell those stocks (Technical Analysis)! This is aimed for both traders and investors who would want to maximize their gains while they are invested in the market. Also if you are from other other regions of the world, we also have Stock Smarts in Singapore, UAE, Australia, Manila, Cebu, Qatar and New Zealand in the next few months! ICON will also be back at Samsung Hall this year, with 7 speakers and more than 1000 people hungry to learn! It is my greatest desire to see more Filipinos both here and abroad to learn the right way to invest. It’s just about time that we reduce scams and we see more people move from consumers to investors!
Where is the PSEi headed?
Now lets get back to business! After the PSEi hit 7,400 last March 21, the market started to correct and started to range and just go sideways for the short term. As of this writing the market is hanging on by a thread to its long term support which is trying to hold everything together so the market still stays bullish. This makes the next few days interesting to see if we stay bullish or we cave in to the selling and uncertainty.
Here are things you need to watch out for in the market:
1. The PSEi should stay above 7,041. If it stays above 7,041 the market will still stay bullish for the long term and will just continue its sideways trend for the short term. This makes the market tradable for people who want to trade the market while it is bullish over the long term and headed nowhere for the short term.
2. So, if the market bounces from 7,041, expect the market to challenge the status quo and go back up to around 7,400. By that time the elections would have been finished and if the results are relatively positive this could be a catalyst that could bring the market higher than 7,400. If it successfully breaks out of 7,400, the next target price of the market as a whole will move to 7,700.
3. On the flip side, if market breaks below 7,041 the PSEI now turns from bullish to bearish after a month of barely staying bullish. Should it break down the market could drop to 6,838 over the short term and if that does not hold the market could drop further to 6,594 and to as low as 6,291. If you are a person who would like to take advantage of the bounces after the market has dropped you may take this price ranges into consideration.
It would be interesting to see how the elections would play out as this could either be good or bad for the market as a whole. Again our goal as traders and investors is not to give into emotion and hype and just stick to our strategy. I will give another update soon on where the charts are telling us the market is headed. I hope this helps you make sound choices in your investments. God bless you all and vote wisely.
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) I also feature other books in my website with authors that I respect which have different expertise in Finance, Business, Investing and everything else in between.
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