Thoughts and action plan for the rest of the week

Reverse Head and Shoulder formation of index seems threatened. For positive thinkers, Index must bounce back Thursday and Friday to follow a cup and handle pattern instead. This is a chart that applies to our small market frequently. Definition here:

If both do not work then... we're on bear territory again, better to cut some losses and raise some cash.

Also noticed that Foreingerz, on some issues, are quietly scooping up shares that they initially (today and earlier in the week) wanted to bring down the price of. Perhaps they're doing some sort of "dump fake" that they hope locals will follow and then they can scoop up just in time for Moody's announcement. They more or less know the lead time of a country review by Moody's, so we should also be suspicious of their nasty da moooveess.

UNCLE SAM SAYS: YOU FOLLOW ME! 

although this representation is a misnomer since English, Australians, Singaporeans, Hongkonglanders et al, are also playing our PSE

If you're itching to make a trading bet...
it should be useful to check out a newsletter that tally Net Foreign Buying or Selling. Comm Ollie at Stockmarketpilipinas has such daily tally (check link on the side of this blog) on his paid THE HINT newsletter. From his tally, observe what was being accumulated actively, but went down more than 1-2% today. It means the foreigns may be starting to accumulate or ready their positions. Then look for disclosures and news which might be related to the negative price action. If there is no real negative news prompting it to go down, place a small bet. If it went down 2%, place another tranch. The stock should recover soon... in time for Moody Diaz???

Market Skim Through July 31, 2013: GERI, TA, MEG, are hit

Funds appear to continue to shed GERI. Will stay away from this stock for the next 30 days (save for a Moody's upgrade). 

TA went down because of 1) ex-date and 2) disclosure that one of the drilling projects at Mindanao was scrapped due to safety issues. I was only able to dispose 20% of my position at high double-digit gain; I intend to hold now what remains. I feel no remorse for giving up a high 15-18% increase. TA and its stock will be fine. Gratifying in fact to see that volume is consistently high these days. 

MEG is more a conundrum why it seems in a hurry to go down. I will add if it reaches 3.1 again, regardless of perceived trend. 

#	Stock Code	Last	Change	%Change	Value
1	MEGW1	2.1500	-0.3500	-14.00%	23,770
2	UNI	0.1620	-0.0230	-12.43%	82,720
3	MVC	1.8300	-0.1700	-8.50%	1,830
4	RLT	0.4850	-0.0450	-8.49%	423,050
5	VITA	0.7500	-0.0600	-7.41%	363,690
6	NIKL	15.0000	-1.1000	-6.83%	13,002,424
7	TA	2.5000	-0.1600	-6.02%	100,521,120
8	GERI	1.6800	-0.0900	-5.08%	15,067,650
9	SPC	5.3000	-0.2800	-5.02%	35,040
10	OPMB	0.0200	-0.0010	-4.76%	200,000
11	AB	20.0000	-1.0000	-4.76%	20,000
12	LC	0.6100	-0.0300	-4.69%	58,206,370
13	DMPL	27.5000	-1.3500	-4.68%	13,875,245
14	IRC	1.2800	-0.0600	-4.48%	6,449,120
15	LCB	0.6400	-0.0300	-4.48%	9,343,170
16	CMT	1.0800	-0.0500	-4.42%	929,990
17	FLI	1.7800	-0.0800	-4.30%	25,100,540
18	DAVIN	1.1300	-0.0500	-4.24%	2,983,610
19	MEG	3.2400	-0.1400	-4.14%	281,274,300
20	KPH	4.8000	-0.2000	-4.00%	48,000

Pick (s) of the week for wK31 are banks

Pinoy stock picker is currently travelling in and around China, but he is checking in to throw in my pick of the week... actually picks of the week.

The banks ought to bounce this week, and should be good for range traders.

BDO is a good to place tranches in. It is forming a triangle. I placed my own trigger-adds in BDO (at 82) According to (just) me, price will easily reach 86.5 in 7 days; Im setting my autosell at that price good until Tuesday next week. My cutloss will be at 78.

And of course, MBT, is a buy (or add) at 107, 106, 105... until 100. I also placed trigger-add MBT at 107 last night. BDO and MBT have attractive 11 - 10 P/E at these price points. Some would call them outright bargains, especially, since BDO bragged an impressive profit disclosure again yesterday. My trigger sell for MBT is 116.5. Will adjust to 130 if Moody's releases the upgrade in near term.

BPI is still the most expensive bank, best to observe closely or place bets according to your experience with the price movement of this bank in the past, how well you like it, and how long you youre willing to stay if a correction starts again. I think at least a money-back proposition within one month is reasonable to expect with BPI. This also takes into account a possible Moody's announcement within one month.  

If I have constant internet connection, I would also monitor the price action of UBP and SECB, and decide  whether to place a bit or just concentrate on the big 3.

Good luck to us.

Watch MEG closely... and accumulate?

Megaworld used to be a 'friendly' stock at least before it was hit  (as most others in the index) by the recent indiscriminate sell-off. It was "friendly" in the sense that you can disregard and be unafraid of the daily dips, because you're sure that the uptrend will be in tact even within the month, more so for long term.

Check MEG's one-year performance:

Its uptrend was consistent from April to beginning June. If it goes down, there are two seeming assurances: 1) it wont dip by much, and 2) it will recover back within 2 weeks, almost guaranteed! But this is before the June butchery. During that bloody month, even the 90-day trend (1 quarter SMA) was broken. And indeed MEG can be declared still inside bear territory today.

So the question now is what to do given that it is beginning to show strength and its characteristic small dips that was previously observed as it goes up.

These will be my guideposts:

• Foreign funds must begin to buy. DEUTSCHE, UBS, ATR, et al must come back.
• Forums might give some clue on how many still shell-shocked investors will exit en masse once it enter 3.7 - 4 + price. There are some many Pinoys left holding the bag there, they might just be hoping and eager to exit without question. This will cause a major correction with MEG and may bend to a significant downtrend again.
• do not add up big time. take it slow. better to miss some of the uptrend the be shocked again.
• the next earnings announcement must be at least +10% income, or else... flat is most optimistic.

And will remember these factors that remain in MEG's favor:

1) Megaworld is still the pride and pillar of Andrew Tan above any of his other subsidiaries. If you read any of his profiles and recollections, you can get the impression that MEG is still his favorite baby, he wont leave this stock to the dogs. There were even supports and insider accumulation that he seemed to have greenlit himself to prop the stock up.
2) Local funds are consistently brandishing up its future value. There was even a news item printed by Inquirer no less that it will be at 9 pesos soon, prompting many local funds to buy.
3) All the recent stock options to managers were kept by the insiders; no one divested.
4) its P/E is only at 12. very cheap for an index stalwart.
5) projects are left and right. marketing of these projects also widespread in Manila and major cities in the provinces.
6) It is managed by groundbreaking, ambitious people who are not afraid to take risks to bring the company to greater heights.

I cannot overemphasize the promise of MEG as a company. But on short term, wont hurt to exercise caution.

Market Skim Through: PSEi practically unchanged, LTG and AC going down, mining going down again

PSE index is practically unchanged today. Index was helped by AC's recovery from as high as -5%+ to -4.22% at closing. Will this perennial foreign fund favorite continue to go down tomorrow?

MEG also recovered at closing from -2.0% to almost a doji. Need to watch MEG tomorrow if there's a need to add up.

Another big conglomerate LTG went down. Both AC and LTG suffered without apparent negative news (so far none disclosed at least).

Mining issues also was negative throughout the day. The 'funny' thing about the two LC stocks and MA especially is they seem to immediately swing-up big (+/- 2% seems small) depending on whether Gold was up the previous trading day (hours) overseas. So if you entered today, must pray same night for gold to rise.

#	Stock Code	Last	Change	%Change	Value
1	ATNB	1.1500	-0.1300	-10.16%	83,300
2	AR	0.0035	-0.0002	-5.41%	91,900
3	PHA	0.2950	-0.0150	-4.84%	157,700
4	UNI	0.1620	-0.0080	-4.71%	3,270
5	LTG	21.9000	-1.0000	-4.37%	62,000,085
6	AC	613.0000	-27.0000	-4.22%	410,160,925
7	MB	0.7300	-0.0300	-3.95%	40,340
8	FOOD	1.2800	-0.0500	-3.76%	1,411,230
9	APO	1.9300	-0.0700	-3.50%	904,220
10	AB	23.5000	-0.8500	-3.49%	193,485
11	FFI	14.7000	-0.5000	-3.29%	44,100
12	LCB	0.5900	-0.0200	-3.28%	2,578,310
13	MA	0.0300	-0.0010	-3.23%	6,303,100
14	FEU	1,200.0000	-40.0000	-3.23%	4,962,000
15	MAB	0.0320	-0.0010	-3.03%	1,158,400
16	PNX	5.5300	-0.1600	-2.81%	5,977,376
17	VLL	5.6900	-0.1600	-2.74%	66,411,973
18	COAT	2.9000	-0.0800	-2.68%	348,000
19	ORE	1.8400	-0.0500	-2.65%	1,532,230
20	ZHI	0.4000	-0.0100	-2.44%	1,405,100