Starting mid-july, the PSEi's upward momentum waned (red channel vs. solid blue channel). The index even broke below its support line last August 13 but apparently, the index was able to rally back to its highs and break its current resistance (red) line. The index now looks ready to resume its prior upward channel with resistance around the 3,650 to 3,700 levels.
Our head technical analyst alerted me of the possibility for the market to do a parabolic spike. Now that I think about it, certain issues had already gone ahead like AGI, LPZ, MEG, to name a few. Their recent uptrend is also almost vertical, which is characteristic of a parabolic spike. But parabolic spikes usually indicate that the end of the uptrend is near. However, as I recall, AP and AEV were in a parabolic spike. The more people tried to guess their top, the more it continued to go up because people who sold early kept on buying back higher.
For now though, I don't see the parabolic spike in the index yet. Yes, I see a strong short-term uptrend but I wouldn't call it parabolic until the index's uptrend accelerates and accelerates. Maybe the break of the 3,650 to 3,700 area would trigger it. Then again, who trades the index? Let's look at individual issues! ;)
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