Amazing. Could it be? Is the danger behind us?
The PSEi opened at 4,286.45 (close to yesterday’s 4,290.14 close), dropped quickly to 4,208.67 (-81.47 from yesterday), climbed steadily higher throughout the day to end at 4,311.02 (+20.88 from yesterday). That’s an intraday range of 102.35 points or 2.4%, still a wide range for the PSEi.
I wonder what seasoned tsupiteros make of the high volatility these days. One pattern I notice, if I’m not mistaken, is that every trading day since Friday, the composite index has closed higher than it has opened. I know the conditions are tough, but I believe there are those who have been right on the money exploiting this recent intraday pattern.
Today’s trading formed a “hanging man” on the PSEi’s daily chart. Since it was preceded by a mere 1 day bounce, it may not be a valid short-term top reversal pattern. Classically, Steve Nison says of the hanging man pattern: “It is especially important that one wait for bearish confirmation with the hanging man. At a minimum this would be a lower opening under the real body of the hanging man. But I usually recommend a close beneath the hanging man.”
Tomorrow should give us a better clue if we are just in the midst of a “dead cat bounce”, or if the PSEi is really “Crouching Tiger, Hidden Dragon”. Let’s see what happens.