Phisix (September 5, 2008)

For this week, the Philippine Stock Index closed at 2724.72, up from 2688.09. Though it suffered a correction last Friday, moving down 1.065%, both MACD and RSI points to a positive direction. The 25-day average is beginning to move up, nearing the 75-day average. In Risk Investing Theory, this is the mark of a buy in the general market. When the market bounce back from a downtrend, usually the 200-day average (long term) is higher than both the 25-day (short term) and the 75-day average (intermediate term), where the short term is lower than the intermediate term. When the market starts to strengthen itself, the 25-day average is the first one to move up. By the time the 75-day average is overtaken by the 25-day average, it is already a marked bull run.

Hence, it is better to invest before that happens. The caveat there is the continued oil crisis at home, and the weakening peso. When the 3rd Quarter numbers come out, this bullish sentiment will be confirmed. The best thing to do now is to invest in a balanced mutual fund. While doing this, we must look for companies to invest on, using fundamentals. This can be done using the Quarterly data of September. Usually, the companies with the highest positive variance over the same data from last year are the ones that should be considered for investment.