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 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%

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

Crappy day trades

I have nothing much to comment today except that the market was led by MER again and many "basura" stocks (third liners). Pretty boring day for me except for that I lost some while day trading--you guess it right--MER! :( OK, I did regret not buying this yesterday, now I regret even more that I made a crappy day trade. I'm still a newbie in day trading, because usually after the time I sold my holdings, that's the time it will rise. Arrrgghhh!!! Good thing I just lost a little. I need to read about this.

I was supposed not to buy anything today due to my bearishness, but it seems like that our market was a bit resilient. Got some PAX again (Oh no! Am I falling in love with this stock? Not good.) and San Miguel B (SMCB) today. I was intrigued at the ability of PAX to whipsaw people, but pennant is still intact. Buyers have slightly picked up today, but were met with a wall of sellers towards 2.60. I was hoping that PAX will return to the limelight again. It seems that we might have a third liner frenzy soon based on what I saw today. :)

The reason why I got SMCB was that it bounced off the 57 uptrend line support two days ago with even better volume today, and because of the MER-SMC connection play. Though this is less volatile than MER, I'm at peace as I know I won't get whipsawed here and there. :)

Dow Jones Futures up by 0.55% as of this writing. Gold seemed to have broken down of US$916 last night. USD is very weak against Yen.

Composition:
SMCB = 17%
PAX = 12%
Odd-lot stocks = 4%

Portfolio invested: 33%
Cash: 67%

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!

July 7 trades

Market seems to have bounced from support since yesterday, but volume of both days were a bit anemic. Philippine Stock Exchange Composite Index (PSEi) went up by close to 1% to 2,472 today but in only Php1.6 billion volume. That means, less and less buyers were willing to bid up the prices especially now that the 2,500 psychological resistance is near. Major contributors to this ascent were MER and Ayala Corp. (AC), which contributed 9 and 5 points, respectively.

I liquidated (or sold, cashing out) some of my stock holdings today. I managed to sell MER at 160 near the open thinking the resistance of 161 will hold. Well, in the end, it didn't. MER managed to hit a high of 165 before closing to 161. Anyway, my gut feel tells me that this was already "toppish" as trade volume from 162 to 165 were a bit thin and MER was now testing the resistance of its uptrend channel. Anyway, at the end of the day I would like to thank the Lord for this timely blessing especially now that He knew my family is in debt. :) MER technical analysis below (click to enlarge):



I cut APO at 1.18 thinking it will not go anywhere, and might even possibly go down once the market corrects. My cost was 1.30, but good thing I only had minimal exposure there. :)

I managed to hitch a ride on PX this morning at 7.3. Volume is still there, so I'm holding this for now but only for a quick flip. Relative Strength Index (RSI) is 75 already which is already overbought. But based on previous RSI levels, we might encounter some resistance at 80 levels. So I think there's still some room to go up (hopefully). Technical analysis of PX below (click to enlarge):



I'm still holding on to PAX even though it was weaker today (minimal volume only). Pennant is still intact. I set my stops (or cut loss or selling point) at 2.40 as this is the breakdown point of the pennant pattern. Resistance still holds at 2.60-2.70. It needs strong volume to break this out. Technical analysis of PAX below (click to enlarge):



Composition:
PX = 24%
PAX = 23%
Odd-lot stocks = 4%

Portfolio invested: 51%
Cash: 41%

July 6 trades

The market started in the doldrums except for the last hour of trading. I posted some "barat" (very cheap) bids for Philex (PX) and PhilWeb (WEB). As expected, it didn't hit. :( So I decided to raise my Good-till-Canceled (GTC) bid for PX to 7.3 towards the end of trading, but remain unmatched by the time of closing. I decided to cancel my order for WEB as it looks like it was "artificially" being bought up to 0.0525. PX looked to have confirmed the breakout last week with matching good volume, so hopefully I could still catch this boat. I switched my canceled WEB order to Paxys (PAX) at 2.46, which seems like to have formed a pennant pattern.

I'm still holding some Meralco (MER), which I bought at 145 last Friday because it's consolidating at it's highs (or seems like a flag pattern to me). MER is doing 153 today. Yipee! I'm still stuck though with some odd-lots. I'm looking to cut Anglo Philippine Holdings (APO) tomorrow.

Composition:
MER = 29%
PAX = 23%
APO = 7%
Odd-lot stocks = 4%

Portfolio invested: 63%
Cash: 37%