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.
March 5th, 2008 at 11:37 am
@ACN
“Predictions” are made before the fact and confirmed after the fact.
Last June 2007, JP Morgan predicted 4400 by mid 2008 (6/12/07 money smart) Salve was looking for contrarians who think the market will not grow in 2008. I said the market was at record high and it may be time to sell (6/13/07 comment) At that time, the market was above 3600 and later over 3700.
Today, I doubt if the market can hit 4400 in June but assuming it could, then now is the time to buy not last year. Am I correct or just lucky? Now I’ve taken a buy position. Next year, we’ll see if I’m lucky again.
March 4th, 2008 at 10:49 pm
If this guy fitz ever got rich from Technical Analysis. I will be the first convert
March 4th, 2008 at 10:17 pm
@salve,
Im a novice when it comes to equities, market, Ive been wondering what it means by psei “closing @ 3,400 points, etc”? Just how is this points or level, calculated, & what does the composite index made of? bear w/ my ignorance, thanks.
March 4th, 2008 at 7:20 pm
some people are reaally good in predicting the past events! haha
that’s why its advisable to cost average monthly.
March 4th, 2008 at 11:11 am
Last year when the market was above 3700, a lot of people were bullish and buying. I said it’s too high and a bit late to enter the market (I came in below 1700). Now people are bearish and selling. I say it’s a good time to buy. I already bought a lot. If market goes down further, I’ll buy some more.