Make Up Your Mind Already, PSEi!

Since 2020, the PSEi has been trading within a range between 5,700 and 7,600. I have been tracking the 5-year consolidation via various 3-wave corrective waves. If the count is correct, we should be close to a capitulation of sorts before the next big move.

After what I count as the completion of both Wave b circle and Wave (i) of the larger Wave c circle, I think we are a couple of months away from the completion of Wave (ii) (refer to shaded square area). If this is indeed a Wave (ii), then what follows after its completion is a convincing decline that will likely pierce through the 5-year support level of 5,700. Such price action will signal the start of a mediium-term bear market for the Philippine market.

Furthermore, chart pattern-wise, you can see in the Weekly Chart a possible Double Top forming by considering the 2022 and 2024 highs (7,500+) as the corresponding tops.

Although it is less probable, the alternative move would be for the PSEi to break above the current consolidation (shaded square area). More price action is needed to determine whether this alternative move will signal the start of a more sustainable bullish move. Too early to say; hence, I believe this move to be the less probable scenario.

Therefore, I continue to watch the PSEi; especially as it moves closer to the 5,700 area. The bearish scenario continues to be my personal bias since the current market consolidation (shaded square area) remains to be nearer to the low-end of the 5-year range.