August 3 and 4 trades

Our market continued to trek up towards the 2,900 resistance level. The mining sector, particularly, Manila Mining Corp. (MA/B) and LC/B, led the rally last Monday, but its strength didn't spill over today. MA/B and LC/B opened higher but closed unchanged and lower, respectively.

PSEi Daily:


We're still within the mid-term up trend channel (red lines), but we're now nearing the "former" up trend channel support line now had become a resistance (blue lines), which is incidentally around the 2,900 area. If we're going to use the "measured move," we can see that it points also to the area of 2,900. MACD and RSI are also testing resistance levels.

PSEi Weekly:


On a bigger picture, strong resistance is seen at 3,000, but we need to be wary as well of 2,900 (encircled). Inverse head and shoulders pattern is still intact as previously mentioned.

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As market continued to trek up, I'm lightening up my exposure just in case it would turn sour. I got some MA shares last Monday at 0.024 as I saw strength in it (it went ceiling then) but sold it today at 0.025 for a measly profit. :( I was caught in heavy traffic this morning so I arrived at the office a bit late. So, I missed the high of 0.028. :( But anyway, at least it's still a profit. For those who don't know yet, MVP also announced that he's considering MA as well aside from LC. I got some feedback from various brokers that MA is a better play than LC due to the fact that the MA's mine site is adjacent to Philex's (PX) Padcal site. Better economy for PX perhaps?

I also sold half of my FLI yesterday at 0.99 as I'm seeing toppish conditions. It was confirmed today as it formed a dark cloud cover candlestick pattern (bearish). See image below:

We'll see the confirmation on Thursday to validate this short term reversal. I sold all the rest of FLI today at 1.00. :)

I also got rid of WEB at 0.055 on Monday for 5% profit after holding it for quite some time now. I decided to sell this because it was not moving much, and decided to free up some capital tied up to this so that I can buy some other stronger issues. Efficiency-wise, it was not a very profitable trade because of the length of time I held on to this, and for only a 5% profit. And, to add insult to my injury, it just shot up today and closed at 0.06! Oh man! :(

I sold half of my AC today as well at 325 for a decent 8% profit. :) It seems to have respected the neckline at 320 today (opened 325, high 327.5, but closed at its low at 320) - classic bearish meeting lines (not good). That means, in an up trend, the price opened higher than yesterday's price, but closed unchanged versus yesterday's closing. I'll hold the rest of my AC for now with mental stop set at the break of 320.

I cut all my CYBR at 0.70 today. I learned once again not to be greedy. I have already set my sights to sell this one last week at 0.80's, but I didn't. The Lord rebuked me. :( I also sold SINO at cost.

I transferred much of my sales today to acquire a truckload of Energy Development Corp. (EDC) at 4.75. It seems to me that it broke out of its flag formation with a target price in the area of 5.3. One major obstacle right now is the major resistance at 5.00.

EDC daily:


Composition:
EDC = 28%
GMA7 = 19%
AC = 13%
Odd-lots = 3%

Portfolio invested: 63%
Cash: 37%

Finally! Trades for the week

I got my break today from the on-going due diligence review so I got this chance to post. (Wait a minute, I'm doing this in my office! I'm so happy!)

The highlight of this week, aside from the State-of-the-Nation Address (SONA), was probably MER (on a speculation of a tender offer) hitting a high of 302.50 on Wednesday, gapping down and went to a low of 190 the next day, reaching a high of 267.50 on Friday, before closing at 229! I'm really awestruck at this volatility. This explains the volatility of PSEi this week. I knew that MER would "crash" on Thursday after seeing huge crosses at 300 the day before that, as I knew that the buyer was already satisfied (at least partially). Initially I thought MER will drag down the market, but I was pleased to see that the funds liquidated from MER were moved to other sectors particularly properties and banking. This was a good sign of healthy fund movement. We even experience huge net foreign buying yesterday!

Technical analysis of PSEi (clickable):



It seems that PSEi broke out of 2,790 and is now moving towards the next resistance at 2,880 (dotted line). It will be harder for PSEi to move up for now as the indicators are pointing to overbought levels. 2,626 remains its support. Actually it's hard for technicians like me to judge the top of the market as much of the volatility lately was skewed by MER. Reverse head and shoulders formation (bullish) is still intact.

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Trades:

Remember the holding company that I said I'm looking intently? It was Ayala Corp. (AC). It is forming a reverse head and shoulders pattern beautifully with neckline at 320. I got a significant portion at 300. Should the neckline be broken convincingly, we should see target 450 to 460. :)

AC weekly:



I also bought back PAX at 2.8. 3 to 3.1 has proved to be a stubborn resistance. Thus I sold all of this at 2.85 average.

I was lured back to LC again at 0.28 due to strong volume on Monday. Well, I anticipated that this would breakout 0.28 that day too, but it didn't. I guess everyone's focus was on MER this week. I decided to cut this one at 2 fluctuations lower. Chartwise, I wasn't that bullish anymore. Negative divergences with MACD and RSI were forming. 0.25 is a very critical support.

I bought a little Minerales Industrias Corporation (MIC) as well only to cut it on the very same day. :( I was whipsawed, thinking that it broke out of 3.5. I decided to transfer my proceeds to MER and FLI. I ordered to purchase a minuscule of MER at 262.5, but only half was matched. :( I took this gamble to purchase MER because momentum was there. I threw out my technical analysis for I know it won't work on this stock. I sold MER too early the next day at 282.5 (that day hit a high of 302.5).

I got a good chunk of Filinvest Land Inc. (FLI) at 0.92 (a bit too high though), because it broke out of 0.87 resistance quite convincingly (with big volume). Property is in play right now, and I believe will spill over to next week together with banks.

I cut all my TUNA at one fluctuation lower than my cost because it was too slow (read: impatience).

I'm happy to hitch a ride with Cyber Bay Corp. (CYBR) at 0.75 average on rumors that a third party investor wants to buy into the company. Also, I bought a minuscule Sinophil Corp. (SINO) at 0.27 on recurring exceptional volumes and breakout.

Composition:
AC = 24%
GMA7 = 19%
FLI = 16%
WEB = 11%
CYBR = 10%
SINO = 7%
Odd-lots = 2%
*Oops! Broke cardinal rule again. :(

Portfolio invested: 89%
Cash: 11%

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The month of July brought me an additional 10% return to my portfolio. Praise God for this for He has provided to help me meet our family debt! Though I'm a bit disappointed because my benchmark increased by 19%. :( I was depressed for about 10 minutes, but I was relieved after I realized the MER factor in July.

July 23 and 24 trades

The Philippine market was very good yesterday, breaking out of the recent high of 2,626 convincingly in very good volume (Php4.5 billion) in response to good corporate earnings in the US. PSEi closed 2,676 or 2.5% higher than last Thursday, but consolidating most of the Friday morning in the range of 2,646 to 2,656 (probably due to indecision after breakout by investors), before the bulls finally taking over during the last hour of trading. Immediate resistance is pegged at 2,750 to 2,780, which might be a tough nut to crack.

I'm seeing a beautiful inverse head and shoulders pattern, which is bullish, forming since mid-2008 until now (refer to the clickable picture below) Yesterday could be a sign that the neckline was broken with good volume. But there's an immediate resistance above it (or could this be the real neckline? Let's see).

PSEi daily (compliments of Yahoo! Finance):


RSI is already pointing a short-term overbought condition. MACD and RSI might test their previous highs as well (MACD - mid August 2008; RSI - Oct. 2007 and June 2009). My take is that we might experience some breather in the next couple of weeks, and hopefully consolidate for now as it will be healthier for the market in the long run.

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Trades:

Last Thursday, after seeing Republic Cement Corp. (RCM) shot up to ceiling with good volume before closing lower (sad to say that I was a bit too hesitant to buy this one due to its illiquidity), I bought a minuscule position in Holcim Cement (HLCM) at 3.55 thinking of sympathy play. But it didn't budge. I decided to cut this one out at one fluctuation lower.

I sold my entire position in LC for a quick 10% profit due to a heavy wall at 0.28 :). See my technical analysis of this in my previous post. I'll get back on this one at 0.25-0.26. Rumors were circulating that MVP and Lolo's prices were miles apart. Hmm...

I also sold my NI a little too early at an average price of 9.49 thinking it will have a hard time to break 10 due to high RSI and resistance. But the jockey has a different idea in mind. :( Yesterday, it went even higher. :( But still, it's a quick 10% profit. I should be content already thinking this was my biggest position last Wednesday. Maybe God is teaching me to be content with His blessings. :)

I was glad that this PAX finally got its feet moving last Thursday after almost a month of consolidating. But I quickly got rid also it for a 10% profit due to strong resistance at 3 area. I'll get back on this one if it goes back to its previous resistance of 2.65.

I also sold the rest of MEG at 1.14 for some coffee money and transferred all of it plus some more to GMA Network (GMA7) at 6.7. It broke out yesterday with volume. Potential target is 7.4 (previous high).

GMA7 daily (courtesy of COL):


To God be all the glory! :)

Potential stocks to trade next week:
I'm looking at going back to LC and PAX if my target buying area is achieved. I'm also thinking at going into certain blue chips again: one is the holding company that I mentioned before and another that is into power.

Composition:
GMA7 = 19%
TUNA = 13%
WEB = 11%
Odd-lots = 3%

Portfolio invested: 46%
Cash: 54%

July 21 and 22 trades

PSEi was trying to mimic how Dow behaved--lots of choppiness. Both markets were experiencing some toppish signals as evidenced by lower value turnover despite in an upward trend. PSEi is yet to test the recent high of 2,626, while the Dow was already testing 8,900-ish.

PSEi was up by 19 points today to 2,612 and was led (again) by Lopez stocks, mainly MER and First Philippine Holdings (FPH), which registered a whopping Php162 million and Php60 million worth of net foreign buying, respectively. Total market turnover of Php2.8 billion was a little bit wanting for me. This just meant that there were lesser aggressive buyers today than yesterday or last week as we are approaching the resistance. Breadth was still good though with the advancers outnumbering the decliners 85 to 33 with 55 unchanged. We were net foreign buying overall of Php162 million today (MER coincidence?).

MER closed 199 today on huge volume after hitting a high of 200. Rumor mill was speculating that Ramon S. Ang (RSA, for short), president of San Miguel Corp. (SMC/B), might be enticed now to sell its MER holdings to MVP at this "spectacular" price. :)

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I got my documentary stamp tax refund today, which added 1.5% to my year-to-date return. :)

I realized that I was whipsawed by LC the other day (refer to my previous post) after massive selling by Felipe Yap-associated brokers. So I bought this back up at a much higher cost of 0.245 instead. :( But at least I was able to ride this one. It broke out of 0.25 resistance today confirming the flag pattern (resistance was also the 100-week moving average). LC closed today at 0.28 resistance on big volume. I expect this to hurdle this resistance tomorrow barring any unforeseen circumstances. Refer to my technical analysis below (click to enlarge):

LC daily:



LC weekly (cup and handle pattern still intact):



The holding firm that I was monitoring (refer to my previous post) was a bit shy these two days. It might test previous resistance first to confirm breakout. I'll keep my eye on this one.

I also bought a ton of NiHAO Mineral Resources (NI) the other day at 8.6 due to strength and breakout from previous resistance of 8.5. I'm still holding onto this one today. We might taste some wall on the 10th to 11.5th floors.

NI daily:



I disposed off more than 50% of my holdings of MEGA-heavy MEG at 1.08 to transfer some to Alliance Tuna (TUNA) at 1.62. Macquarie seems still has a lot of bullets to pepper hapless MEG investors like me. :( Selling to buy MER and FPH? Macquarie were top buyers of these two today (this broker was associated to MVP before. Hmm...). Buying of TUNA was based purely on breakout of 1.60 strong resistance. But we might experience some selling towards 1.68-1.70 as seen in the chart below:

TUNA daily:



I'm still holding on to the rest of my holdings. PAX looks interesting. I expect this to erupt soon as there were signs of accumulation on going. :)

Composition:
NI = 27%
PAX = 16%
TUNA = 13%
MEG = 13%
LC = 11%
WEB = 11%
Odd-lots = 3%
*I broke my cardinal rule of not to hold more than 5 stocks at a time. I guess I'm just bullish (for now). :)

Portfolio invested: 95%
Cash: 5%

Somebody didn't want to have her picture taken

Who's she? Why is she camera-shy? :)

Answer:

... Because it's her birthday today! Happy birthday Kayla_wonders!

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Trades for the day:

I dumped all my LC as Lolo (Felipe Yap, majority owner of LC and stockbroker) didn't want to cooperate. :( Good thing I still profited from it. :) I'll be keen to buy this back again if opportunity arises. I'm still holding on to the rest of my stocks. I'm looking at one holding company today. Technically speaking, it's a very good buy! Let's see tomorrow. :)

PSEi did a great move today coupled with strong volume. Big foreign buying is cornered by Lopez stocks and some properties. Heavy net foreign sellers were present in banking. Market is still intact to retest again the recent high of 2,626. European markets are up by close to 2% and Dow Futures by 0.71% as of this writing. Oil and gold are up 2%! Time to brim up your cars!

Composition:
MEG = 32%
PAX = 16% (very disappointed)
WEB = 12%
Odd-lots = 3%

Portfolio invested: 63%
Cash: 37%

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