On June 29, 2006, the Philippine Stock Index closed at when the divergence is at 0.6478. It went up that day from -1.6178 the previous day. The lowest from previous days is -26.9654 on June 14, 2006. The MACD lines during those days were still negative. From then on, we saw it rise to positive region, peaking at around the 90s on January 25, 2007. Now, after that, the Phisix still did move up, but then the MACD lines started to go down.
On March 8, 2007, the 12,26 (up) MACD line touched the negative region. It was at -39.003. Divergence was at -46.7814.
Last Thursday, March 22, 2007, divergence started to be positive again, after wallowing in the negative region for sometime. It was at 8.2383 yesterday.
From these technical indicators, there is a good probability that the index will move up these coming days. The attitude however is still towards selling. I believe that there is another cycle of up-down. Especially since the election days are coming. The market will move up, perhaps to another interim high. At that point, no news will perk it up since the first quarter reports are still coming. If those numbers are good, then the index will inch up some more, but it has to give in again to selling. This will be around end-April or early May. By this time, wait-and-see attitude will have prevailed since the elections will just be around the corner. This is the time for the market to consolidate. If the elections turn out to be peaceful - which I believe will - the market will march up again. That is the time to plunge in the market again.
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