Moves at 6800 index

I was selling shares at 6800 as planned and wanting to transfer the gains immediately to issues that are fundamentally sound but are still far off (for some reason) from their 52-week high. Having too much cash while there is still upward momentum is obviously not optimum.

I would like the issues that I freshly get into to not to have a negative news or pending decisions attached to it. MWC and PNX are examples of issues very much below their peaks but have attendant problematic [regulatory] news attached to them, so these are stricken off.

FLI, SECB, SMPH, BPI, are the others Im looking at. They still have room before hitting resistance against 52-week highs again, but of course these are not guarantees. The assumption is if we're on a general uptrend already, these should wake up some and we can benefit riding them as they stand up the bed of slumber, even for short-term.

For SMPH, I would like it to correct to 16 to relieve overbought conditions before going up again. It is also not a long-term issue for me, because of its high P/E. If I do get in, the intention is just to ride for short-term.

SECB--it would also be useful to watch for increase in foreign buying again (like last year) before getting in or adding to existing positions. It would be ideal to see a combination fo 3 among MACQ, CLSA, CSUISSE, JPMORGAN to buy in bulk again. I'd also like to see WEALTH buying as well.

Im holding the rest of the position in blues to ride them until we near 7 K or index weakens and breaks 50-moving average line. Breaking below 50 is always a possibility is we near that dreaded month of May again.

Congrats to those who already profited. You should have already recovered from last year, and gained substantially these past five months, if you stuck buy our attractive fundamentally-sound picks.

Looking Good but (but with -->caveats)

My port is going up, cash position is healthy.

News reports say that inflation is still within acceptable range and the BSP is sending indicators that it will not be increasing interest rates soon.
-->Although inflation in itself still worries me. Because of my day job, I know that pork prices is increasing steeply because of factors overseas. The boom in construction is ongoing, while the new cement plants of LRI, et al are still not yet on line. These will continue to have a natural inflationary effect on local prices.

Previously sleeping stocks in my main port have awakened with a bang. FLI, perhaps because of its well-crafted press release, was again noticed by both foreign and local funds. I liked how FLI included these sentences in the release:



Lot prices at Filinvest City have hit a high of Php186,000 per square meter, significantly above the previous highest price achieved during the height of the property boom in 1997, right before the Asian Financial Crisis, and the price of Php115,000 Php per square meter in 2012.

I like how they highlighted that lot prices in Alabang has nowhere to go but up. And that no one has the better land bank (still for sale) in that part of Manila than FLI. 

-->But I still dont like Filinvest's project locations in Metro Manila. Their Oasis condo compound in Pasig is an Oasis of because if becomes a sea of floodwater when it rains. Im still ambivalent over FLI as a long-term holding. 

TA is also showing some vigor again.
-->but some locals just wanted to exit, impeding its upsurge.

The banks are showing strength at last. Im green again in BPI (entered just last week) and MBT (old holding + returns). I still have some SECB also. 

-->But again, any policy change by the BSP will zap even a 10% gain in any one bank. 

So, bottom line, I might sell big in May and/or June. And I still intend to sell at 6800 as earlier set and declared in this blog. 

Pick of the week for Wk 16 is to accumulate your favorites; give a special eye on banks

I was about to post yesterday LRI as the pick of the week because of the merger news, but because of an early morning meeting, I wasn't able to go online even to open brokerage and post a market opening buy (to add up early). LRI since flew away. Im selling current position--entered into months ago--in LRI at +20%..

I suggest you already position on other previously-good performing stocks. Check their upsurges during the bull run last year. These are my off-the-cuff suggestions:

--GTCAP still has a very probable +5% in short-term.

--then the banks BPI and MBT still have big room to increase, until before BSP announce an interest rate increase (you must watch out for news on this; we must exit some positions before they do the announcement and then just buy again below. bsp has no choice but to increase interest rates because the increase in inflation is also imminent at this time).

--BEL is a good stock to accumulate until Q4 when they open their casino and a surge will occur (if you wait that long, the price might already be too high). See the trend of BLOOM months before they opened Solaire in 2013.

--TA has room until it reaches another resistance at 2.18 - 2.23

But these are not strong recos at this point. I suggest you still look around. Look around on your own. Research. Check history, previous price movements of specific stocks, news, committed milestones. For power companies, for exampl, check when plants and increases in capacity are planned to happen.

For me--Im still maintaining a good cash position just in case AGI, MEG, SCC, or PGOLD temporarily goes on sale. I have already GTM buy points set for these stocks.

Entering gently

Trend followers recommend that we buy at big volume the moment the index started to break resistance at 6550, which happened convincingly yesterday.

However I opted to enter gently. I bought BEL at two tranches, and it promptly turned green same day. I added also to existing positions in FLI and ELI, and then BPI. The addition in BPI seems to be iffy since banks today seem unattractive and being exchanged around foreigners (instead of buy-and-stay-a-bit) for some reason.

Entering in small tranches is just a precaution. I feel that many countrymen are poised more to take profit than stay on for longer, so stocks will definitely not jump straight as they did last year. So better still to have some cash to be able to add on big and small dips.

The next two weeks, again, will be crucial for us to judge if we're on to finally a general market uptrend.

Looking into those issues with zero or negative 1-yr return

If we are really on the recovery/upsurge now, it's good to look at fundamentally-solid (read: not SMC) and high-volume-traded (not SGI) first liners that have negative or almost-nil 1yr returns. These are the issues that took beating almost for no reason, other than the QE tapering and foreign funds wanting to exit.

Plus points if the stock has below-15 current P/E.

In my watchlist are

SECB (-10% 52wk, 13 P/E)
MBT (3% 1yr return, 9 P/E)
FLI (-15% 1yr, 8 P/E)
AP (1% 1 year, 13 P/E)

BPI is marginal. Although it has negative 52wk return, it has above 15 P/E.

If you bet this way, you'll be banking on the possibility that foreign funds will look first on these issues as the among the first ones to recover fast. And we hope to get on in that ride.

Share also your watchlist.

Market Skim Through: 17 September

The PSEi gained 0.66% yesterday to close at 6,344.14. Volume was Php10.07 billion. Foreign investors were net buyers at Php 1.34 billion. Steady foreign buying that is unexpected given the upcoming FEM meeting. The natural move was for them to be on the sidelines, but they might be moving already based on what they believe as the amount of tapering. I will still keep my minimum 30% cash position though.

TSI is the center of another sad case of people at Financemanila taking advantage of co-forumers. After a ceiling move, a press release was sent out detailing a rights price way lower than ceiling. This price was predicted by other bloggers, but FMS mainstays continued to hype TSI, one even saying that Emperador/TSI is a future blue chip. There are moneygrabbers in forums, that's a fact. This is now our own version of boiler rooms.  

Other observations: 

BPI is silently recovering (this was out of my radar the past few weeks). Will this go back to 100 PhP soon?

MBT was red, but not terribly red. It was being pushed up every time there's a threat to go below 85. This will be green tomorrow.

BDO now seems the laggard among the top 3 banks. This is still trading [relatively] sideways, will it surge up soon? 

ICT is another of the few stocks that already went back or exceeded its level during the heavenly days at 7300-7400. Investors probably believe the promise of ICT's expansion, operating ports in different parts of the globe. 

In everyone's mind of course is the QE tapering that should be announced early tomorrow. My bet is that any reduction in bond buying greater than 20 B is dangerous to us--another huge sell-off will happen. While any number below 10 B is expected/good; this uptrend/recovery should continue. Between 10B - 20B is a puzzle; we dont know if all the foreign funds will have a unanimous move at this range.  

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.

On Banks During Week 30

No, not Tyra, but

BDO
BPI
CHIB
EW
MBT
PNB
RCB
SECB
UBP
AUB
PBB

Our modestly-sized stock market seems to be starting on the uptrend but these stocks appear either just flat, range trading, or in the case of SECB, continuing to go down. They are also relatively cheap in terms of P/E and general expectation, considering that it's well known that banks rake in after investment rating upgrades and all. Nobody would have thought BPI would go back to 92; and who would have predicted two months ago that MBT will be back ranging between 105 - 115?

The short-term concern supposed to be is that these banks have lost a lot during the recent PSE bloodbath and that their Q1 earnings might have been erased by the severe, hurtful market forces of last June. I wont pretend to be an expert attempting to valuate the perceived trading loss vs. their other business and revenue stream (loans, fees, remittances) to validate if the claim is true.  I would just say that the fund managers must be carefully assessing the exposure of each firm (theyre not too many after all) in bonds and equities, and making their moves based a carefully wrought-out reports. Is SECB, for example, the most exposed in their analysis, so theyre continuing to sell it? If youre a short-term trader, best to be safe, listen to what these fundies are sounding-off with their moves, and stay on the sidelines.

But if

1) you are a medium-term trader and is known to wait out result of a gamble in 3 months
2) you believe that Moody's will make its long overdue upgrade this quarter (theyre a damn pompous, self-important, prissy agency if they dont upgrade us in Q3)
3) you are foreseeing that the stock market will go back to 7000 levels in one month...

I would say cheap is cheap.

Choose your pet bank, and place small bets now!

I have averaged down on SECB (I see their branches sprouting out all over metro and think the  20% dividend ex-date will get this stock re-energized on to its upward track, at least on medium term),
Im retaining my BPI core and watching closely if I need to average down further here,
MBT is my pick for week 30.
I would also buy BDO again if it goes below 83.
and closely watching UBP (their CEO is a stalwart of investment banking)

Good luck to us!