PSEi due for correction

Last week, the US market was up after the manufacturing results and the jobs report showed better than expected figures.  But after the series of important data showing that the US market was fine and still in the path of recovery (although at a slower pace), the focus now then shifts to Europe especially Germany.  Last night, the US market was down -1.03% as the concerns among European banks resurfaced.

Locally, I still maintain the view that the PSEi is due for correction today after six trading days in the green zone.  This is the needed springboard/rest before we take out the all time high of 3873.5 three years ago.  Shown below are my projections on our favorite stocks in today's trading. I based this solely on the charts, regardless if the DOW was green/red.

Both DMC and AP closed on the red yesterday losing around 2%.  It was mainly because of the relentless selling of Deutsche, ATR and COL on both stocks.  Thanks to JP Morgan for stopping the bleeding.  DMC is exhibiting the bearish evening star pattern and I expect the price to be in the 23 - 23.13 range.  I expect AP's price to go down as well to the 19.87 - 20  range.

MEG and MPI were relatively strong yesterday closing up at less than a percent. MPI has found strong support at 3.55 but I think it can go as low as 3.49 - 3.51 today. MEG's pattern is similar to the bearish three inside down pattern, I expect the price to be in the 1.99-2.01 range.

As for DGTL, after more than two months it's now above its 20-day moving average (the last two days).  I am still optimistic/bullish that the spike to 2.0 will be really soon.  This might pull off some surprises today.

I suggest waiting for tomorrow to buy some stocks at a cheaper price.The correction will continue mainly because of the long weekend ahead, which traditionally is profit-taking time.