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Bear Alert on Southeast Asia Cement Holdings (CMT)

Apr. 13, 2011 10:16 PM ET
lytman02 profile picture
lytman02's Blog
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southeast asia cement holdings, CMT philippine stocks, head and shoulders, rising wedge, ron acoba, daily stock picks, stock market trading

Putting your money into the shares of Southeast Asia Cement Holdings or CMT in the Philippine Stock Exchange is a bad idea for me as of the moment. Well, at least that’s what its chart is telling me.

CMT has actually performed so well during the past 6 weeks when it bounced from a low of around PHP 1.20 all the way up near PHP 1.80. But don’t get fooled by this price action as looking further will tell you that this recent run-up could be nothing more than a short term rally. As you can see from its chart above, CMT broke down from a head and shoulders pattern. Shortly after it did, it found its way to a low of PHP 1.20. It then rebounded into what appears to be a rising wedge pattern. Now, a rising wedge is generally a bearish pattern since it also represents a temporary bounce in prices. In any case, a fall below the wedge’s support could send it all the way back to PHP 1.20. Notice also that peak of the wedge coincides with the 50% Fibonacci retracement that I drew. This further indicate the possibility of a break down soon.

So beware and stay on your toes.

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