VIDEO: Outlook for equities in 2008

Fitzgerald Aclan, one of the most experienced technical chartists in the country and the chairman of Absolute Traders, says the key levels to watch for at in  is 3,400 for the Philippine Stock Exchange Index (PSEi) and 13,200 for the Dow Jones Industrial Index.

Fitz also believes that the PSEi’s ideal support level is at 2,900 to 3,000. The PSEi on Monday closed at 3,079.99 and the DJIA ended at 12,266.39.

Here’s a So What Chocnut moment. Think of a “support level” as a sticky point that stocks find hard – historically — to bust through on their way down. It’s the historical bottom that investors look for as a signal to buy. Two things can happen to it: it can be confirmed when investors buy stocks at that level (at which point prices start going up, right?) or wiped out if investors still don’t buy at that level and stock prices continue to go down.

Fitz says that while prices are inclined to trend lower in the coming weeks, he predicts that there will be buying opportunities this year. In fact, he advises investors to take advantage of these declines to enter the market.

“If you look at the historical movement of the Phisix, if you take out the coup d’etat and the financial crisis, the market has probably declined about 25 percent from the highs. We are pretty much there in terms of the absolute level so we remain confident. In fact, we take advantage of those declines to enter the market. Again, this could be a once-in-three-years buying opportunity,” Fitz says.

It seems too rosy when you consider that over at CNN, MarketWatch and Fortune, the headlines are all about rethinking investments, sell strategies and a depressing analysis that stocks will never be the same again. If Fitz had not accurately called market bottoms several times in the past, I would have been more pessimistic. As it is, I’m starting to believe the technical chartists know a lot of things the rest of us mortals don’t.

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