After 3 months of downtrend price action, PSEi started showing signs of Bullish Divergence pattern on many technical indicators (around first week of May). The breakout from its 3 months downtrend line and into the 4th month of another pullback (a sort of Dead-Cat-Bounce or DCB), Bullish Divergence pattern continues to unfold.
- Bullish Divergence pattern as price action gets closer to the major support area around 7400 is a potential sign that it's closer to the bottom if not the bottom yet.
- If the price action starts to consolidate around the major support area, it will likely confirm the Bullish Divergence pattern and signal the bottom.
*See previous PSEi chart analysis here:
https://psetrends.blogspot.com/search/label/PSEi
Trading Plan
- For medium to long term position trade, accumulation of key stocks (or index fund) near or below 7400 should give a good risk-to-reward ratio moving forward.
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