My pick of the week for Week 30 (July 22)

My pick of the week for this week is MBT, for the following reasons.

1) Metrobank is acknowledged within the top 3 banks and within striking distance to claim top spot from BDO or BPI, but it's surprising to see this security cheap at 10 P/E

2) There is an impending 30% stock dividend that can easily jack-up price by 5 - 8% in the week that the ex-date of this hefty payoff is announced.

3) I see FAMI's fund managers better than BPI by a mile (what's with BPI's High Conviction Oddyssey Funds), and MBT's services and online capability at par with with BPI. (although mbt's ambiance inside their branches seem gloomy. Perhaps its the Chinese frugality seeping in a bit).

4) MBT is starting an upward trend channel, however shallow the slope is. If it breaks 120, chartists will recognize it as breakout, and they will come in droves.

5) It is also now touching 20-day SMA. Some chartists ready with their test buys to enter tomorrow if MBT delivered a strong showing at +1% or more. This will add to overall attractiveness of  MBT.

6) There was a big bullish volume last week, led by foreigners. My bet is they will try again one day this week.

7) Decent increase in core net income q1 this year vs. q1 quarter last year. This is a fundamentally solid bank. If we do CANSLIM, the only thing missing is a remarkable 'new' product (or would this be the first ETF?) and the overall market uptrend of PSE (Moody's, where are you?)


TRADING PLAN:

I think buy price at closing (108) last Friday was a good entry. If it goes down to 106, I will double my position. At worse, if it continues to go down, I will continue to add up until 99.8.

If there's no aberration (like a fund eagerly unloading for some reason), I believe It wont be difficult to see +5% any day within the next 14 days, but it will be up to the person if s/he would take profit after seeing this 5% or hope for a breakway towards 120-130 range. My suggestion is to get profit, range trade, and be safe until we are on a clear market uptrend.

I was already able to profit considerably from MBT last week with double tranche at 110, then 108.5 then 109, then sold all at 113.9 at automatic trigger (the volume last week was unremarkable; I was not on my table when foreign buy-up suddenly started one afternoon). Ive set 114.8 sell trigger (because of the upward channel) for this round, but if I see strong buy-up one morning, I'll cancel it and re-set to 119. But if overall psei movement is too volatile or volume is sluggish, divesting even at just 113.9 again is ok with me.

Again, I think MBT is very probable to show +5% (from 108 closing last Friday) in one given day in the next 14 days. Grab the chance to profit, but dont pour in all your cash. Place a medium bet, then add in tranches if it goes down marginally. You should be able to sell all in two weeks.