PST Fund Year-End Report

With trading for the year 2010 now officially over, Pinoy Stock Trader is proud to announce that since inception of the Pinoy Stock Trader Fund in November 22, 2010, to December 30, 2010, the PST Fund has grown by 35.04%, as compared to Philippine Stock Index growth of only 0.34% over the same period.

Below is the PST Fund performance, against the PSEi.

Gains were mostly made from trading PCOR, SMC, LND, PX, LC, and a few other stocks. While losses were made from CLOUD and LC during the same period.

To know more about the PST Fund, you can contact me for more details.

Pinoy Stock Trader

MER – Breakout From Inverted Head and Shoulders

On the penultimate trading day of the year 2010, many stock issues have been going up, with MER among the best performer, seemingly breaking out from a bullish inverted head and shoulders neckline of 207. MER also closed at its high of 221, up by 7.3%.

After establishing lows of 186 and 188 for the shoulders, and going as low as 170 for the head, MER's price action on this morning trading session has finally allowed it break free from the key resistance line of 207. The two-month price target for MER, according to the area pattern, is at the 245 levels.

Stops could be placed below the 195 support area.

With this, the next immediate price target for MER is around the 225 area, before attempting to take out the more significant resistance line at around the 236 area. If MER also manages to break this resistance in the future, are we seeing a retest of the 300 price level? We shall see.

Pinoy Stock Trader

Day of Breakouts – LC from Inverted Head and Shoulders, BEL from 4.00, LND from 0.87

Today seems to be a good day for these two stocks, as LC finally broke free from the neckline of the bullish inverted head and shoulders pattern at 0.395, while BEL smashing through the critical and psychological resistance level at 4.00, and LND establishing a new two-year high to close at 0.91.

After consolidating between a low of 0.32, and a high of 0.395 and in the process form an inverted head and shoulders pattern, with 0.395 serving as the neckline, LC has finally broken free from this bullish area pattern, confirming the reversal from the downtrend starting from the high of 0.66 last September.

And with this move, price target for LC is pegged at 0.47 within 3 months. Sell stop should be placed just below the 0.375 level, in case our expected price action fails to materialize.

BEL has also performed very strong earlier, closing at 4.30, after finally taking out the 4.00 resistance level, and holding ground above it. This signifies the resumption of its bullish 45 degree trend line since early November.

As expected and noted in my blog post yesterday, LND gapped up to open at 0.91, filling the gap at 0.87, and to finish strong to close at 0.91, with some bid orders left unmatched. From this point on, LND should trudge steadily higher, towards the 1.10 technical target. Sell stops can now be moved higher to just below the 0.87 level.

Pinoy Stock Trader

Breakout Watch – LND @ 0.87, PX @ 15.00

LND

With a strong move by LND to close at 0.87 earlier today, Fil-Estate Land now looks poised to take out the key resistance level at 0.87, which it has failed to breach since the September 16, 2010. Closing at its day high, and finishing the runoff period with heavy volume on the bid side, barring any major geo-political events, this looks certain to gap up on tomorrow's trading.

After breaking out from the symmetrical triangle last December 9, price has since retraced the previous triangle resistance line, before finally making the strong move today. The three-month technical target at 1.10 remains intact.

PX

After breaking out last December 6, 2010 from a flag formation, or descending triangle formation, PX was unable to breach the 15.00 level quite convincingly, and has since just hovered below this level. Earlier today, PX attempted once again in vain, to take the 15.00 level for good. While it did manage to move higher at 15.04, price action was again repulsed at this level, sending PX lower to close at 14.84.

If PX does indeed manage to breach, and hold the 15.00 level, immediate target for PX will be at 16.00, 17.00, and the grand daddy of all resistances for PX, the 20.00 barrier. However, if PX failed to take out 15.00, then PX may have to retest the 13.00 support level.

Pinoy Stock Trader

San Miguel Party Resumes

On a lethargic market session earlier today, San Miguel-related stocks once again took center stage, as SMC, PCOR, and SMB all posted significant gains with 5.5%, 6.1%, and 2.8% respectively.

SMC finally resumed its bullish momentum, after dipping near its breakout point at 125.00, proving that conservative breakout traders, those that buys when price dips near the breakout point chronicled on this post, can also have fun and join the ride.

PCOR on the other hand, looks to have broken out from what appears to be a pennant formation, with a potential price target of 18.50, based on the pole established during the last part of November. PCOR also looks to finally overcome the 13.00 level, which has eluded its price action last December 1. Stops could be placed around the 11.00 levels, in the event that our expected price action failed to materialize.

Meanwhile, SMB continues to trade very volatile, but still managed to close at 29.50, possibly moving sympathetically with SMC and PCOR.

Tomorrow, lets find out if San Miguel can outdo its bullish party hosted during the latter part of November.

Pinoy Stock Trader

Random PSE Musings: Index Failed to Move Above the 4,200 Level

For the fourth straight week, the Philippine Stock Exchange Index still remains unable to break the immediate resistance at 4,200 with conviction.

While the index attempted several times to take out this resistance, it was met with heavy selling, and to close out this week, the market fell by almost 2 percent. At this point, it appears that the index is headed towards the key 4,000 support level, which was briefly breached last November 30.

The outgoing week also produced several breakouts, none of which have successfully made a follow-through move, indicating that the market is still on a selling mode, getting out from ipits on any opportunities that may arise.

CLOUD, or IP Converge, also debuted this week catastrophically, not once trading higher than its IPO price. Which was probably dragged down by the under-performing mother company, IPVG.

This week has been a crazy one, now, let's see if next week's trading goes even wilder.

Pinoy Stock Trader

LND – Breakout From Symmetrical Triangle

Fil-Estate Land was one of the few bright spots during the local stock market session earlier today, breaking out from the symmetrical triangle that it has been consolidating inside since mid-September, to close at 0.81.

After breaking out from the symmetrical triangle, which was accompanied by very strong volume, LND might first retest the resistance at 0.87, which was the high last September 16, before moving higher on the back of a strong bullish momentum.

Measuring the triangle, LND now has a technical target between 1.10 to 1.15, which should be achievable within a span of 3 months. It should first, however, move above the immediate resistance at 0.87.

Stop-loss orders could be placed just below the 0.70 levels, in the event that this move turns out to be a flop.  

Pinoy Stock Trader

SMC - Breakout From Flag Formation, Confirmed

San Miguel has finally broken out from the 125.00, flag formation resistance, as mentioned in my blog entry just yesterday:

SMC – Another Flag Formation Waiting to Breakout?

Congratulations to those who have bough upon breakout, as technical target for this move should take SMC towards the 150.00 level. To those that have missed out on the breakout, you can wait for the pullback just above the 125.00 level, IF there will be a pullback hehe. Otherwise, just try to buy on a price you're comfortable with, as it is not healthy to go on chasing prices.

Now what to expect for SMC tomorrow? Given that SMC finished very strong on today's session, and on the day high, tendency is that SMC will probably open strong also tomorrow, to fill in pent up demand from today's session. This is possible, as long as the US and European markets doesn't do anything crazy, or the Kim Jong Il finally going mad against South Korea.

Still, as with any trades, always have a proper trading plan. If price retreats, and falls below 115.00, which is the flag formation support level, then one should cut this stock, as this would signal a failed technical move. 

Pinoy Stock Trader

SMC – Another Flag Formation Waiting to Breakout?

Following PX's breakout last Monday from a flag formation, or descending triangle whatever you look at it, San Miguel Corporation is now also trying to breakout from a flag of its own.

After establishing the pole last November 18 and 19, SMC has consolidated between 115.00, and the elusive 125.00 resistance level. Now if SMC will finally manage to breach this level convincingly within the next few sessions, we will be looking at a price target near the 150.00 level, which would present a strong psychological resistance.

To trade SMC, one should wait for the successful assault against the 125.00 level, accompanied with strong volume before buying this stock. Don't preempt any breakouts, and set your stop-loss level below the 115.00 flag support level. With this in place, you should be fine.

While MACD shows that a bearish crossover with the signal line is imminent, chart-wise, SMC still looks good. And coupled with rumors circulating that San Miguel is going to offer secondary shares to the market, with price ranging between 150 to 200 pesos, there is a strong motivation for the jockeys to push SMC towards the 150 levels. Provided of course, that this is true hehe.

Pinoy Stock Trader

PX – Poising For a Flag Formation Breakout?

Looking at the PX price chart, price action for Philex Mining appears to be forming a flag formation, and at the moment, looks set to finally break this consolidation period, and resume its bullish push starting from latter part of August 2010.

After twice bouncing from the 12.90 support level, PX has managed to retest the flag formation resistance level, and if it succeed in breaching this level, the upward price momentum for this move could take PX to as as high as the 19.25 area. Looking back since late September, volume for PX has been consistently been decreasing in value, which could signal a significant price move may be imminent.

Breakout from 14.25 should be the trigger price, and any move below the 12.90 level should also be the signal to cut any losses from this stock. Again, never preempt any breakout in price, and only buy if the breakout is supported with convincing volume.

However, PX also appears to be forming a descending triangle, which incidentally, a break below the 12.90 level will also signal the breakdown from the bearish descending triangle formation. In closing, don't touch PX, unless a convincing breakout has occurred.

Pinoy Stock Trader

DMC – Breakdown From Head and Shoulder Pattern

DMCI finally fell from the head and shoulder neckline support at 33.00, to close lower at 32.05. With this price move, DMC looks set to be in a bearish bias for the next two months, and will probably test the support level at 25.75, which is also the head and shoulder breakdown price target.

After establishing the three peaks to form the head and shoulder pattern, and failing to sustain its steep bullish run from September, price has reached an exhaustion point, and may now be correcting, at least for the meantime. Looking at the weekly chart, the divergence from the uptrend line established from February this year has been too much already, and the recent breakdown may bring it closer to the trend line.

Once DMC has come back to the February 2010 trend line, and respected the trend support, then DMC can turn bullish again. However if not, then expect a renewed selling pressure from the market.

Pinoy Stock Trader