July 15 and 16 trades

The Dow went up by 1% yesterday afternoon (US time) after Nouriel Roubini's "rosier" US outlook. It traded mostly flat in the morning. The Dow is now at 8,712 as of yesterday, which has confirmed the negation of the bearish head and shoulders pattern that I was saying on my July 14 post. It looks poised to test the resistance again in the area of 8,850. What worries me a bit is the volume.

On the local front, we're enjoying a long weekend. No trading today because of tropical storm "Isang," which caused the curtailment of governmental work. So since there was no central bank work, therefore there were no clearing facilities, and no trading. :( Good thing was that the PSEi confirmed the 2,500 breakout with volume and good breadth. Weekly volume increased from Php12 billion last week to Php12.3 billion this week (sans the MER block trade on four trading days only). Moving Average Convergence-Divergence (MACD) now showed a buy signal. We might test 2,626 pretty soon. :)

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I increased my holdings on LC by 25%. I'm pretty happy with this one though it's now experiencing some resistance due to the 130 and 200-week moving averages. My average cost is 0.214. :)

I bought some Metro Pacific Investment Corp. (MPI) thinking it will rise very soon as it was near the up trend support line. It did for a while, but was met by a brick wall at 6, and was sold down to 5.7. I decided to cut it one fluctuation lower than my cost as I don't think it's going anywhere for now. :(

I sold PAX but buying it again at a higher price. :( Man! This is hard to time. My hunch is that a (big?) move is coming.

I got a truckload of Megaworld Corp. (MEG) also, but it seems that the investors were experiencing some indecision as evidenced by the doji. I realized afterwards that I had overexposed myself on this one. :( But with interest at all time low, I can't think of any way that this will not benefit property developers. Besides, OFW remittances are at record highs. :)

Composition:
MEG = 32%
LC = 25%
PAX = 15%
WEB = 11%
Odd-lots = 3%

Portfolio invested: 87%
Cash: 13%

July 14 trades

Dow Jones jumped by 2.3% to 8,332 last night on positive remarks by analysts on the financial sector. Could this have negated the head and shoulders pattern (neckline was 8,200)?

PSEi tried to follow suit reaching a high of 2,514 mid-trading day, but people were on "sell-on-rally" mode once again. Index hit a low of 2,484 before closing just 9 points higher than yesterday to 2,492. Some excitement brought to us by Lepanto Mining Corp. (LC/LCB) due to "revived" rumors of Manny Pangilinan's (MVP) buy-in. LC and LCB shot up by 29% and 25%, respectively, on big volume particularly LC. Wealth Securities (code: 269) was the biggest buyer of the said securities today. Sympathy play trickled in to the rest of Felipe Yap stocks (Manila Mining [MA/MAB]) and other mining issues as well.

We saw today also the block trade of MER amounting to Php20 billion, which was the block purchased by MVP from the Lopezes at Php90 per share.

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I dumped BPC and SMCB today at a minimal loss because I think they were toppish. But I was whipsawed once again, this time by BPC. :( Some big buying by Macquarie and Regis on BPC brought it to close on its high at 2.42! Sigh. :( Thank God, I was able to hitch a significant portion of my portfolio on LC. :D It closed on its high at 0.225 (bid price) with gargantuan volume. I expect this to gap up tomorrow and continue its ascent. Technical analysis of LC below (click to enlarge):

Daily:


Weekly:


We can expect some resistance towards 0.25 then 0.28. Weekly Cup and Handle pattern points to 0.36.

I'm still holding on to WEB and PAX. Technical analysis of WEB and PAX below (click to enlarge):

WEB Daily:


WEB Weekly:


WEB broke out from 0.0525 the other day. Price target is 0.06 to 0.0625 based on uptrend channel and weekly Cup and Handle pattern.

PAX Daily:


I'm disappointed with PAX to be honest though this is still within the pennant pattern. Bolliger bands are contracting, which is a sign that a major move is coming soon. Bull or bear? That's the question.

Composition:
LC = 21%
WEB = 13%
PAX = 11%
Odd-lots = 4%

Portfolio invested: 49%
Cash: 51%

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Incidentally, tomorrow is my dad's 57th birthday. Advanced happy birthday dad! I'm glad that you're trying to live a healthier lifestyle now. :D

July 8 trades

OK. What I find so liberating in the market today was that Liberty Telecom (LIB) stockholders are finally liberated (all puns intended)! From the previous price of just 0.20 about 3 years ago, this stock opened at 1.50 and devouring every single seller mercilessly up to 3.05 in just about 10 minutes from the opening before closing at 2.95. Most of the trades were done around 2.85 to 2.95. We should take special note of the block trade at 3.25 amounting to some Php1.9 billion, bringing LIB all the way to the top of the most active stocks of the day. (Thinking out loud: Where did the 50% ceiling go? This stock shot up by MORE THAN 1000% today!)

Aside from LIB stealing the limelight, it has been a pretty boring day. PSEi went down by 10 points on a measly Php1.5 billion turnover (sans the LIB block trade). I guess it was just that many are on a "wait and see" mode these days. Below is my technical analysis of PSEi (click to enlarge):



PSEi is hugging the uptrend support line for a few days already. With diminishing volume, I'm really wary about this. Resistance is still pegged at 2500, while support is at around 2,440. If we'll see a convincing breakout soon, I expect this market to test 2,626 again. If it will breakdown, we can see some ample support below at 2,350 (previous low), 2,300 (38.1% retracement), and 2,200 (50% retracement and 65-day moving average).

I can't accurately say where we're heading moving forward, but taking cue from the US markets, especially the Dow Jones Industrial Average (DJIA), which broke down from the neckline (at 8,200) of the head and shoulders pattern last night, I'm a bit bearish now. You can refer to the the intraday charts of DJIA on the right part of this blog. Moreover, RSI of PSEi is now below (and testing) the 60 mark, which was also once a resistance.

Due to my bearish mood, I sold all my positions today, except for the odd-lot stocks I have. Odd-lot stocks are those stocks below the normal number of shares required for trading, so I can't sell it (for now). I sold all my PX at 7.5 only to see it go higher towards the end of the day. :( Anyway, a profit is still a profit. Got rid of PAX as well at 2.42. Admittedly I got whipsawed here. I thought it's going to breakdown already by the movement of the price (refer to my analysis on my previous post). But just to give me a peace of mind, I decided to sell even though pennant is still intact not taking into consideration the trip down to 2.36 at some point of the day. Let's see tomorrow what will happen. PAX hit a high of 2.48 on measly volume before closing unchanged at 2.44.

I'm dumbfounded at MER today. It seems that it's not respecting its resistance (closed at 169 today). There must be something brewing with MER and other Lopez stocks. I didn't enter this again. Hopefully I won't regret it tomorrow. :)

Composition:
Odd-lot stocks = 4%

Cash: 96%


** By the way, heard that Semirara Mining Corp. (SCC) won the Calaca Power Plant bidding over Banpu today. Tune in for the news!