Random PSE Musings: PSEi Correction Goes Deeper, But No Worries… Yet

The Philippine Stock Exchange Index, or PSEi, has just fallen below its immediate support at 4,060, and also below the psychological 4,000 level, bringing the much awaited market correction deeper. From the all time high established at 4,413 last November 5, the PSEi has now lost more than 10% in value, and more than 400 points.

While a lot of observers, including yours truly, have been calling for a meaningful market correction, it seems that the correction we all have been looking for has finally arrived. While the sudden drop in the local market may alarm investors, especially the new ones that have just invested on the market highs, the PSEi still remains healthy in medium to long-term charts.

Looking at the weekly chart displayed above, the market run-up from September to early November, have caused the index to deviate further higher away from the uptrend line established way back in March 2009. Now, the recent bearish market sentiments have caused the PSEi to somewhat move closer to this trend line, initial support for the index is seen at 3,900, with the 3,800 level serving as the key support level.

However, if these two support levels get broken, then you guys can now worry hehe.

Reversal of Fortunes for FOOD?

Alliance Select Foods International, or FOOD, is poising for a reversal from its bearish trend, as it tests the 1.50 key resistance level, which it has been trying to breach since the middle of October. Since December 2009, FOOD has been trending lower, coming from the 2.16 level, and this time, FOOD has an opportunity to break free from this bearish bias.

Looking at the price chart, FOOD has somewhat managed to squeak past this bearish trend line, to encounter the 1.50 key resistance line. Now, if price manage to break out from this level, FOOD will encounter 1.60 as its next resistance, and 1.70 as the next.

Buy on breakout with convincing volume, and don’t preempt any breakouts, as FOOD can still respect the 1.50 resistance level, and consolidate further.

Metrobank to Offer Stock Rights

From the PSE website: MBT Stock Rights Offer

Despite the recent corrections on the local stock market, listed companies are still keen on capitalizing the “still” bullish trend and strength of our local market. Metrobank (MBT) is now to offer to the general investing public a Stocks Right Offer (SRO), with the entitlement ratio and price to be determined at a later date.

With MBT joining the list of IPOs and SROs of Cebu Pacific, Nickel Asia, Lepanto and IP Converge, shows that the listed companies and other businesses are still bullish on the future prospects of the market to further expand their businesses.

Will post more details as more data becomes available, so stay tuned.

IP Converge Data Center IPO Now on Offer

Offer Price:  4.20 Pesos Per Share

Listing Date: December 9, 2010 (tentative)

Offer Shares:  45,466,667 commons shares
More Info: IP Converge Data Center IPO Offering Circular

With the IPOs of Cebu Pacific and Nickel Asia already behind us, a third IPO is looming just around the corner to close out the year 2010. IP Converge Date Center Inc, or CLOUD, is the newest IPO in town, a spinoff of IPVG, which is also a listed company on the Philippine Stock Exchange.

CEB performed okay on listing day, and some might even say lackluster. This is probably due to CEB’s extremely huge share offering, and coupled with a price offered on the higher end of the offer range. With Nickel Asia, which just traded this Monday, it went up by 30% on listing day, only to weaken towards the end with heavy foreign selling. Proving that foreign investors can also do the “chupita”.

But in the case of IP Converge, with a very limited amount of shares on offer, there is a good chance that this will hit ceiling on opening day.

Sound good right?

Never mind what their business is, (which is by the way about a data center, obviously haha), with only 45 million shares to be offered to the public, demand for this IPO is definitely going to be crazy. Brokerages are allocated with only 102,000 shares, so good luck with your broker giving you shares hehe, unless of course you’re a VIP client of that particular brokerage. You might ask, so how do I get shares for this IPO?

There is a Local and Small Investors, or LSI program, available for the common investors, but the thing is, your allocation will be capped at no more than a value of 25,000 pesos per investors. Sounds little right? What you can do to increase your allocation is to bring in friends, relatives, or even your yaya to apply for this IPO under the LSI program, and just credit these shares to your account with your broker hehe. It might be time consuming, but it is worth it. And you will thank me after December 9. ;)

Click here for the detailed IP Converge LSI Program.

If you’re going to get shares through the LSI program, and don’t have a broker, you can contact me, and I will be happy to serve you.

CMT – Ascending Triangle Breakout

Southeast Asian Cement Corporation (CMT) finally managed to breakout from the 2.06 ascending triangle resistance line, to close strongly at 2.12. As you can see on the chart below, CMT’s bullish momentum is likely to take price towards the 2.55 price area within a three month window, so traders that have missed this opportunity still has a chance to join this price move.

As with any trades, you must always have a trading plan in the event this trade doesn’t perform as expected. In this case, cut loss if price falls below the breakout point of 2.06. But at this point, outlook for CMT is looking good, with the MACD making a piercing upward cross on the signal line, indicating that recent price action for CMT is still bullish.

Random PSE Musings - Is the San Miguel Party Over?

For the first time in 10 trading sessions, SMB finally went red, closing at 25.00 pesos, or down by -7.6%. While this is not totally unexpected, the actual decline came to be a surprise, as SMB went as high as 31.90, before turning about face, and crashing down. With its very volatile move earlier today, at least SMB has established an immediate support level at 22.50, and could consolidate between this level and 31.90 for the time being.

Still, the next few sessions will be crucial, as we still have to know if the 22.50 support level can be held. If not, then expect another bloodbath for this issue, and can go as low as 18.00 as its next target.

While PCOR managed to hold on to its gains and close at 10.10, it still is a far cry from its day high at 11.80, also burning a lot of investors in the process. LIB even joined the party early on, but this also closed far from its daily trading high.

Now, rumors has it that SMC, the parent company, is planning to offer secondary shares to the investing public next year, offering SMC shares between 150-200, which could probably explain why SMC-related stocks are moving northwards simultaneously. Well, it is up to you if you want to join the San Miguel party, or just look away, thinking that the party is over. 

Petron Corporation (PCOR) – Breakout From Symmetrical Triangle

After months of stagnation between 7.30 and 6.20, PCOR finally broke out from the symmetrical triangle resistance at 7.35, and finish higher at 8.61. While the price target for the symmetrical triangle seems to have been reached already at 8.80, outlook for Petron still looks good, as it may consolidate and establish a flag formation, before going further up.

Immediate support for PCOR is at 7.90, which was the previous high from September 27, 2010, and any break below this level should be a signal to sell this stock, either to rake in profits or to cut any losses. Still, one can’t stop thinking that PCOR might have moved, because of the strong move of its affiliated companies, like SMB and SMC. News on these moves are of course brewing. 

San Miguel Brewery (SMB) - Continues to Defy Gravity, Closes at 27.05

For the 9^th straight trading session, San Miguel Brewery continued to establish long white candles, to form a very steep pole! Many are certainly saying that SMB must at least correct and consolidate, before moving upwards, but still, there are no signs that this stock is going to slow.

But if people are clamoring for a correction, it did correct earlier to 18 pesos, before assaulting a high of 28.30. And folks, that move to 18.00 may be the only correction we will have hehe. No, just kidding. :D

People have been asking me for several days already whether to buy SMB, and all those time, I said no. Now, they may be wanting to kill me for saying no haha. Seriously speaking, buying SMB at this point is very fool hardly, and with an RSI of 98.64, this is absolutely cannot be sustained.

While SMB still has strong momentum left to carry it higher in tomorrow’s trading, it is bound to fall anytime soon, so just observe from the sidelines for now, and ask for balato na lang  to those who profited from SMB hehe. And if you are one of the lucky ones that have SMB, balato naman jan hahaha!

NIKL - Nickel Asia Corporation IPO Opens Strong, Before the Foreigns "Tsupita"

Nickel Asia Corporation debuted earlier today its stocks on the Philippine Stock Exchange. Its opening price was at 19 pesos per share, and going as high as 19.40, before losing momentum to eventually close at 16.50 pesos per share.

While NIKL performed better in its debut agains Cebu Pacific's (CEB) IPO a few weeks back, NIKL's IPO was very volatile, moving within a 20% range in the morning trade. Usually on IPOs, it is the foreign investors who have the "strong" hands, with locals the one selling upon opening to make a quick buck. But this time, it is the foreign investors that are taking advantage of the IPO euphoria, selling down on any bids made by the local investors.

Still, it will be interesting to know what will happen on tomorrow's session, as this could also offer insights on the potential move of IP-Converge's IPO next month. Stay tuned guys.

Aboitiz Equities Ventures (AEV) – Breakout From Ascending Triangle

Technical analysis of AEV has just shown that price has broken out from the 36.50 ascending triangle resistance line, to close at 38.30 up by 7.9% during today’s stock market session. With its current bullish momentum, we can expect AEV to target the 40.50 ascending triangle price target within the next two weeks. MACD line is also poised to do a bullish cross over the signal line, further confirming the bullish strength of this move.

Now, the ideal entry point is around the breakout point at 36.50, so you could try to at least get the possible price if you wish to trade this price action. If you already have positions, you could take profits around the 40.00 level. And if the trade didn’t pan out as expected, set your stop loss at around 34.50.

San Miguel Brewery (SMB) – Continues to Spike at 14.00, But Can This Be Maintained?

From 9.50, SMB, or San Miguel Brewery has continued to rocket and close at 14.00, in a span of 5 trading sessions! Now, lucky holders of this stock should now consider locking in profits on tomorrows trading session, preferably on the early part of the session, as this price spike cannot be sustained for an extended period of time.

Now, what should investors and traders do next? Well, you can wait for price to correct a bit and stabilize a bit. With this kind of price action, this has a potential to form a flag formation, with the spike serving as the pole. Now, if a flag or pennant formation does indeed happen, one can buy on breakout from the area pattern formed.

Until then, I will monitor further price developments from this stock, and will update you guys. Stay tuned.

Random PSE Musings: PSEi Continues Moving South, Continues Correction - November 17, 2010

Following last Monday’s corrective bounce, the PSEi is back in the red on today’s session earlier in the morning. The PSEi closed 70 points lower, or -1.69%, as the Philippine stock market continues to correct from its recent all time highs established two weeks ago. Looking at the weekly chart from the early of 2009, the PSEi’s ascent has been too steep, and could not be sustained. As seen in the chart below, price needs to move around the 3,900 trend support, before making any upward move.

Amibroker Charting Software, Chart Data, and Historical Price Quotes for the Philippine Stock Market – Guide on Getting Them

One of the most important tools in trading the Philippine Stock Market is a price chart used for technical analysis. However, how can you do technical analysis if you don’t have a charting software, or the historical data to read in your charting software? You’re in luck, as I detail in this post the steps in setting up your own chart for all active Philippine stocks.

Random PSE Musings: PSEi Continues Long Overdue Correction, Technical Rally Very Ripe

Wow, for the 6^th-straight day, PSEi did another long black candle closing at 4,076.68, down by 67 points or -1.63%, and approaching the psychological resistance at 4,000. This makes the index very susceptible to a technical bounce. Early on during today’s trading, a lot of investors are panicking, selling across the board and at one point almost losing as much as 100 points.

PSE Rumor Mill: Nickel Asia’s (NIKL) IPO is Now Doing at 16 Pesos Per Share, Over the Counter

*EDIT* Price is now doing 17.50 OTC!

Apparently, there is a very strong demand for Nickel Asia’s IPO that brokers are now looking to buy NIKL shares at 16.00 Pesos per share, over the counter.

We are also actually looking to buy NIKL shares at 16.00 per share, any amount will do, but preferably 10,000 shares and up. So if you have NIKL shares allocated to you, and would want to sell it for an instant 1 peso profit per share, you can contact me hehe.

MEG – Pullback BUY on Ascending Triangle Breakout

A buying opportunity is presented for Megaworld (MEG), after price pulled back towards the 2.56-2.58 breakout out area performed last November 2. This gives a good buying opportunity to those investors who missed the breakout from the ascending triangle Last November 2. The price target for this particular move is towards the psychological 3 pesos barrier.

Random PSE Musings: Correction Continues, Presenting Some Buying Opportunities – November 10, 2010

Much needed correction is now happening on the PSEi, as the 4,260 immediate support level is now breached. Next support is seen at the 4,140 level. On the 4th straight decline, a technical rebound could occur, so try to watch out for it and use it to your advantage. 

At this point, I think the PSEi may go into a consolidation period before deciding to continue establish new highs, or to go further into a corrective mode, and consolidate between the 3,900 and the 4,400 level. It remains to be seen on what’s gonna happen next, but stay tuned.

EDC – Bearish Breakdown From Descending Triangle

EDC has just broken down below the 5.90 descending triangle support level, confirming one of our scenarios on last Monday’s post about EDC. With this bearish breakdown, we can now expect EDC to try and test the support level and descending triangle price target at 5.30 towards the end of the year.

EDC – Falling Wedge or Descending Triangle?

EDC continues to consolidate inside a falling wedge area pattern, with breakout points seen between the 6.05 to 6.20 levels, with initial price target seen at around 6.70.

However, it also appears that the price is consolidating inside a bearish descending triangle area pattern, with the support level seen at 5.90, and initial price target of 5.30 upon breakdown.

With these two scenarios, what to do next? Well, the best way is to wait for a price breakout, which should be a signal to buy. Still, should price breakdown from the descending triangle, it would be best to stay away from this issue, and try to pick up at the 5.30 levels, provided that price action holds above the gap.

Random PSE Musings: Welcome Corrections – November 8, 2010

The Philippine Stock Index, or PSEi, just finished its second-straight decline to close at 4295.62, down by 1.2%. This decline is largely due to the TEL’s 1.5% decline, after plunging by 8% on last Friday’s trading. Still, the market appears to be taking some corrective declines, following its record-setting ascent in last week’s action. This correction also validates my suggestion last November 4 to take profits.

Nickel Asia IPO Priced at 15 Pesos, Sign of Low Demand?

It was just recently that the price for Nickel Asia Corporation’s (NIKL) IPO, or Initial Public Offering, in the Philippine Stock Exchange, was set at 15.00 Pesos per share. Initially, the offer price range was pegged between 14.95 to 23.00 Pesos per share. With the final offer price being set at the lower range, does this mean there’s little demand?

PSE Daily Recap: Another All-Time High, Time to Take Profits? - November 4, 2010

For the 3^rd-straight day, the main index PSEi registered a new high by rising 15.44 points or 0.35%, to close at 4,397.30. As the index continues to explore uncharted regions, one could ask: “Is it time to sell?”

NIKL - Nickel Asia Corporation IPO

At a glance:

Offer Price Range: 14.95 - 23.00 Pesos per share

Tentative Listing Date: November 22, 2010

Offer Period: November 9 to 15, 2010

Now, after the crash-landing of Cebu Pacific’s (CEB) IPO, now closing even lower below its IPO price, investors are now starting to doubt the success of Nickel Asia Corporation’s IPO. But what really are in store for us, the traders and investors?

PSE Daily Recap: PSEi Riding High, as Cebu Pacific Crashes Down - November 3, 2010

PSEi registered a new all-time high to close at 4,381.86, up by 40.12 points or 0.92%, while Cebu Pacific bucked the trend, falling even lower below its IPO price at 119.80, after going as low as 116.

It's IPO Time Once Again: Nickel Asia and IP Converge Data Center

Two close out the year 2010, two companies, Nickel Asia Corporation, and IP Converge Data Center, will be offering shares to the public via an IPO, and to try and ride the bullish wave currently sweeping the Philippine Stock Market.

I'm back...

... trading in the Philippine Stock Exchange!

After almost a two-year absence, from the local stock market, I am returning.

I know fate has given a new chance in this market, following my stint in the market in 2006-2009. I guess I still haven't finished my mission here, that's why I'm back here once again, to... to wreak havoc? No, of course not. I may have my own highs and lows with the PSE, but all these experiences only made me a better trader/investor today.

Of course, me returning is not all about money. Though I need to work harder now, as me and my wife are now blessed with our little angel, I have returned to help others navigate our still fledgling investment market.

I now that we're on never-seen before levels for the PSEi, and this is the perfect time to invest, but know this, this is the very same feeling among investors and traders, before the market collapse of 2008. And ladies and gentlemen, it is my duty to help and guide you to make the most out of the market, and at the same, manage the risks.

I have much more in store for this blog, so stay tuned. But if you have any questions, please feel free to drop me a line.

Have a nice day.