“Marvin! I just wanted to know what’s your take on the PSEi now given all the upward movement the past few weeks? Are we hitting 10,000 soon? Your advise would be very much needed.
Also just a short thank you, as I heard about you after watching your youtube videos. That made me interested about investing. I have been investing in the stock market for 9 months and thanks to the foundations that you have provided I am getting the hang of it. I even encouraged my brother in Dubai to attend your talks there.”
Felix., Engineer, Makati
Will we hit 10,000?
Hi Felix! That’s great! Keep on investing, keep on learning! Never stop growing on the inside. The more you know the better your trading and investing strategy will be! Please tell your brother to say hi, when he sees me this July in Dubai!
Allow me to use this post to answer your question, with the hope that it helps other people asking the same question as well. Also, I am sure that aside from knowing where the market is headed over the near term another fascinating question that everyone would love to hear the answer to is will the PSEi hit 10k? For more than 3 years now I have heard reports, rumors and questions about it ever since we saw the market hit 7,400 last 2013. 3 years after we are just 300 points where we were 3 years ago.
I am a trend follower
For those who know me, have read my books or attended my seminars, you know that my style for both trading and investing is really by just following where the trend is leading. I will never forecast where the markets are headed. I will never try to guess how long a bull market will run because I believe no once can actually predict where markets are headed and be right 100% of the time. I also will never try to buy at the bottom and sell at the peak. I also use fundamentals to try to select good stocks and to enforce what is currently pushing the current trend but I will never try to guess the outcome of an earnings report that will translate for me buying and selling.
As a trader and investor my goal is to follow where the trend is going and ignore all the noise around me. That’s been a style that has been effective for me for the past years. In line with that, this is how I will attempt to answer this post. It’s not by someone trying to predict the future but by from one trader to another looking at how the charts are telling us to act.
Catch me in my live training events! (quick plug)
The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.
Stock Smarts Davao — October 20 – October 22, 2017
Stock Smarts Malaysia — November 4 – November 5, 2017
Stock Smarts Sydney, Australia — November 11 – November 12, 2017
Stock Smarts Qatar — November 16 – November 19, 2017
Stock Smarts Singapore — November 25 – November 26, 2017
Stock Smarts Manila — December 2, 3, 9, 10 & 16 , 2017
Stock Smarts Taiwan — December 21 – December 22, 2017
Stock Smarts Cagayan De Oro — January 13 – January 14, 2018
Stock Smarts London, United Kingdom — January 26 – 28, 2018
Will the market push higher?
I am a big follower of support and resistance, along with breakouts and breakdowns. This may sound foreign to a lot of people who don’t use charts but for me this is my bread and butter. As of this moment, the charts are telling we me that we just broke out of the resistance at 7,662.
To those who don’t use charts yet (I encourage you to do), watch the 7,662 level. If the market stays above that, I believe there is a larger buying presence that will cause the market to go higher. If it does, it could bring the PSEi to around 7,936 for the short term.
What if it fails to hold 7,662?
The market still stays bullish for the short, mid and long term, however it could possibly correct to 7,543 to as low as 7,479 if the market drops the above mentioned price range.
What about PSEI-10,000?
Let’s see first if the market can break 7,936, if it does, it gives it a shot at 8,133 again. Should it break above the 8,133 price range then we are seeing the market hit another higher high. This gives a mid term target price of the market to 10,196! Again this is all contingent on the PSEi breaking and staying above 8,133. Should it fail to do so, we can bid any chance for the market to hit 10,000 at this point in time.
When is the Bear market coming?
As of now there are no indications for a reversal so if you are a position trader or an investor you can still continue to hold on to your position. This also is applicable to those who have equity and balanced funds and to those who hold stocks that normally follow the index.
Based on my analysis, the PSEi will turn bearish if we breakdown and go below 7,021. Which as of this point we are now relatively far from. This also places a bit of risk for those who are just getting in now.
What if you don’t have any positions yet?
So if you are just getting in now, you must be very selective in your choices and be sure to select stocks that are just starting to breakout an move upward. The higher the market goes, the bigger your risk is, as the potential for its downside increases. Of course, if you are a quick trader, you can disregard this since your choice of stocks will always be based on bounces and breakouts. These things happen in the PSE regardless of the general trend of the market.
Bull and bear markets come. Profitability happens when you know what to do when these type of markets come. It’s about you forging your strategy on how you can position well when the market is cheap and reversing upward and the discipline to hold it while it is headed up, along with the courage to sell and take profits when you see the market reversing downward.
Again there are no perfect strategies but rather there are profitable strategies that you can build and develop over time. Don’t look for profits first. Look for knowledge and use that knowledge to build you strategy so that you become profitable year in and year out! God bless you!
I hope this helps you felix!