PSEI: Correction Bound?

The Philippine Stock Market Index has been stellar since 2012 stepped in. The index has gone up from a little over 4300 after 2011 to as high as 4950 (as of this writing) or roughly 14% in less than 2 months. We are officially in a bull market. A bull market is a market condition wherein almost everybody is a genius, even the beginners. Almost all the stocks you buy go up if given some time resulting to hefty gains.

However, looking at it short term, the index may go lower for a few days (which is quite rare for 2012).

The chart above shows that the index, which is currently at 4950, is near its possible psychological resistance at 5000. It is also inside an uptrend channel which pegs its resistance at 5000.

However, PSE's RSI is still far from overbought which may, just may, push it higher past 5000.

Whether PSE corrects at 5000 or will break past it, it doesn't matter. Oil, mining, the financial sector, real estate, and everybody's new favorite, the basuras are doing more than just fine, as well as other sectors. This bull run has a long way to go because this has been the long overdue run last year (Japan tsunami, chaos in the middle east, European debt crisis, who cares about Europe especially Greece these days by the way? haha!) and companies in the Philippines has been so fundamentally excellent. Prices will continue to go up so let's enjoy the feeling of being a genius while it lasts. haha!

You can disregard the index but if you want a more better return, consider trading with the index's momentum.