On MBT on April 2014

I have unloaded almost all of my MBT positions in my nimble port, where MBT used to occupy 40%. In my main port, I still have a substantial position (although I have unloaded some already yesterday). 

Im keeping the rest for until we near 90+? I think the 'healthy' foreign buying is still consistent.  

And, while we are on the subject of trendlines, all possible downward trend seems to have been breached. I expect chartists also believing in MBT again.

Only the upward channel remains:    

If MBT goes down, it could be relieving overbought conditions only. My only worry is we're May already by next week. The Sell-in-May crowd is real and almost tangible. Theyve hit in June-July last year, yes. It's probable that we do another steep dive (temporary or not) within the next 3 months. So it's always good to maintain a 30% cash position (minimum), for the buying down.

We're also waiting for the earnings announcement of MBT, which should be out today or Friday.

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.

Pick of the Week updates

I'll make it a practice to review my picks 4 weeks back always, since Ive made it a point since Q4 last year to stay with my picks normally at a month's horizon.

It's nearing harvest time for the picks of the weeks.
--in wk8 (GTCAP)... Im at 5% now, will be considering to sell at 8% tops.
--wks 9 and 10 (TEL)... on top of the hefty dividends in PLDT, we might get some cherry on top, probably +3% in the coming few days.
--wk 7's MBT, where I profited already (with MEG) substantially, I still have some position remaining in my nimbler port at +4%. We'll probably sell all at +5%. (My bigger port still has substantial MBT, remnants of last year, at -2%).
--Wk 11, the dividend-paying-company-nearing-exdate-announcement that I chose is MER. It is showing +1.97% for me today, but I placed only a small bet. I'll sell at +4 or 5%.

These target sell prices are based on the premise that PSEI will correct again once it reached 6650. As most retail investors, Im hoping that the PSEi will have momentum until 6800 in a few days; after all, it's rare to see a net foreign selling day since beginning Feb. But Im already willing to take some profit at 6600-6700.

Good luck with the possible jump up in the next few days.

Pick of the week for Wk5: stand by for hoped-for short term fall

I'll obviously be biased by my move the past few days. Again, I unloaded all of my DNL and BDO, substantial of MEG and TA, and some MBT, hoping these will 'cool-off' a bit before I reenter.

So the pick of the week is to observe these five to go lower by 25% of their recent increases. Most of them jumped by at ~15%, so I would like to see them go down by  3.75%-5% from their peaks or before  I enter again.

As usual, since we are not yet in a clear general uptrend (for the market overall), our entries will be in minimum tranches.

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.

Late Pick of the Week: Look for higher lows in JGS, MBT, MEG, but if you're eager to position now, choose TEL

I knew I have time to monitor the market this week; there is valuable time to spend to hunt for short terms gains, so I disposed some green in MBT, MEG, AGI, and AEV to raise cash. I expect that sentiments of some locals will be to dispose at our current 6600 levels. Some of our countrymen who were jittered before are probably exiting at near breakeven, so it's time to dispose some green and wait for them to dip again by at least 3%--better at minus 5%--to re-take similar position size.

For example, I disposed a huge chunk of MEG at 3.91, the moment that I saw that 1) the stock is already oversold, and 2) it's too weak to even break 3.95. And so, 3.91 less 5% is 3.71. Im waiting since then to enter some at 3.71, add another position at 3.70, and then a huge buy position at 3.68. I still haven't been blessed with shares at these levels, but am waiting. If MEG continued strongly at this very high RSI. I still have 20% of my original position. I just have to live with my bet that it's more probable for MEG to cool off a bit and be below oversold levels.  

Same applies with AEV, AGI, and MBT... I disposed all or huge chunks of these stocks, and now Im waiting for their higher lows to materialize before getting in again (first reentry at -3%, ideal at -5%).

But since I wanted to take some new positions and not be holding too much cash, I took positions in TEL and DMPL as well. I think TEL is undervalued at this time, and will perform some +5% in short term. Why? 

1) its forward P/E is 16, while its only competitor GLO is trading at 23 - 30 P/E. I know that the Ayala's enjoy some premium over competitors because of their perceived better managers, but that disprity is just too much. 

2) the BPO industry is experiencing tremendous growth and TEL should be one of the main beneficiaries  

3) PLDT's DSL is way faster than those stupid Tattoos and mobile broadband scams.
4) If youre caught ipit even at -10%, there's still some margin of safety. TEL always pay hefty divs to make up for it.

DMPL I placed a small position in because 1) its current price is below its current at SGX, 2) I feel that the market hasnt fully taken in the impact of the acquisition of the US Del Monte business. This makes for some good reading regarding DMPL:

http://research.maybank-ib.com/pdf/document/Del_Monte_141013c_5174.pdf

Besides that, Christmas is nearing. We're approaching that time for Buko and Fruit Salads. That would have some Del Monte Fruit Cocktails by default.

Again, these picks of the week have time frame of at least four weeks. It's time to revise your portfolios for intermediate and long term and prepare for the surge until March.

Recounting Week 39

If I was asked to place a bet last Sunday on whether the market will go up or down throughout last week, I would have bet that the market will go up even by 1%. What happened instead was we went back to a low 4-6 B PhP trading per day, and locals took profit. We're down 2% as a result.

There were also some negative rumours about AGI that made locals sell. That news about its shortchanging of upcoming backdoors and IPO's could be true, but Im ready to average down even if it goes down to 19.

The news about SMC, JGS, and MER also made impact. I made a separate post on this topic.

The main news that brought down equities seems to be the stand-off between US Congress and Obama on budget. Obama should show the lower house that he has some balls to shut down the government if needed. I think Speaker Boehner and his cohorts have smaller balls, and will give in the next two weeks, prompting a rally just before FED tapering news permeates again by end-October.

I profited +3% twice on JGS in the week, and sold half of green MEG just to hedge. I will add in MEG though if it goes down to 3.34 again. Im sticking to MEG as a good pick, with a time frame of two weeks. Im also still holding a significant MBT at 6+% gain
Im retaining cash position at 30%

I also made one tranche entry in SECB, which immediately turned green on the same day. I think its preferred shared rights is good for the stock price in the end. And SECB also tumbled dwon so low from its June high, it has so much room for an intermediate uptrend.

I was also watching VLL, because of its low P/E (good for value investors), new vigorous involvement of basura swimmer (good for 'N' in CANSLIM as explained by James), and solid sales growth. But it seem unable to get past the 5.5 hurdle. And more importantly the sell-side volume is always higher than ask. Im eager to get back to this issue at 5.05, but will probably start with one tranche on 5.15.

And then I also caught up on the last two episodes of Breaking Bad. Ive been a heavy user of IMDB since college (more than a decade ago), and this is the first time ever I've seen a 10/10 score in any film or tv episode. And it's fully deserving this perfect-ness. I cant help but blurt out an audible "wow" after I finished watching it myself, alone, in front of a desktop computer.

Others who are not following Breaking Bad might not be able to relate and be "hit" with the fullest impact of the episode. If you are not yet a Heisenberg follower, start now, even with just the 4th season. It's good to invest time in probably the best series ever in TV history (beating even Sopranos and The Wire).

Formulate your action plan for longer, say the next 4 weeks

My suggestion is to change trading time frame and go 4-6 weeks. Suspend for the mean time the day-trade or 3-day time period. Choose your favorite companies, perhaps those that steadily gave you profits last May-June. Remember, their earnings remained steady as they are--except the banks that lost big in trading (after foreign money pulled-out en masse) and the companies that borrowed heavily in dollars early this year.

There's a theory that the stocks that were not as affected and not too up-and-down shaky during the down turn will also become the first ones jumping in the upturn. PGOLD, JFC, AGI, are three of these stocks. I placed my bet on AGI. If you want to align with this theory, do a quick look at the graphs of all the PSEi stocks and some second liners. Find the one which did not dip too low and did not oscillate too wide.

MEG, although dumped by foreigners in July-August,was heavily bought up again yesterday. It can become the reliable stalwart again. In fact if this becomes a steady hand , the whole index would also be comfortably steady in its upturn. MEG is now moved on the first page of my watchlist, a candidate for adding-up.

AC and MER were also steadily-increasing index stocks before the QE tapering news. They also deserve some focus.

The banks are being bought up by foreign funds again. Search a bank of your own if you still have funds to allocate. Also dont forget dividend paying and those with low P/E, remember those metrics are also being looked at by fund managers.

Half of my holdings in MBT was hit at previously-set 88.5, all remaining GTCAP was also hit at 840 (previously set), as well as tranches in VLL, even before I got the chance to open FMS or BPITrade. Im suddenly 50% cash when I started checking the market. I bought one tranche in JGS and AEV to release some cash. Only AEV was the bad pick, but Im betting this will recover today.

By the way, thank you GTCAP for being a good pick of the week. Although youre not a favorite by locals, you gave me profit 3 times around.

I don't agree with the early profit taking done by our fellow locals late in the morning and late closing. (My own mistake was in not taking time opening PC at home to cancel all sell orders before the market opened). The FED tapering was the most important concern, since we were relieved by that then our market will probably be allowed its "natural" trend, which should be up given the rosy corporate earnings and braggable GDP growth. Im not privy though on the emotions of our fellow pinoys that sold big yesterday (see COL selling figures). They might be shell-shocked new investors  that want to just want exit out unscathed or recover some of the losses.

And yes, the "relief" is only good until November 1.The FOMC will meet again Oct 29-30. By the time we go back on trading again on November 4, there could be a firm announcement on the amount of tapering that will happen within the year.

But at least Ben Bernanke now  laid out more certainty. He said that tapering will not start if US unemployment wont go down below 6.5%. So that's also a number to watch out in the news for.

Now, how would we know when to sell?
1) check the trend. If still going up or above the SMA lines, let your profits run, and MACD histogram trending up or stable.
2) but i'll be comfortable selling at 12% gain. (My current MEG and MBT are already showing 8%)
3) sell when you see the  US unemployment improve to way below 6.5%
4) sell before All Saints day break.
(strong sell if there's combination of the 4 conditions)

And dont forget to read news daily. For instance, you would not know there's another bacman bad news in EDC if you dont read the news for a few minutes.  

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.  

Choose to be conservative with a cash position (maybe just for this week)

PSEi broke through convincingly its short-term moving average. MACD is also now [also convincingly] above signal line. To chartists, both are signals to buy.

Technical Analysts believe that the chart should already contain all the story and emotions (or everything 'priced-in'), including the plans and anxiety of the participants of the market. This could mean that the price improvement show there are needless worries for the upcoming FED meeting. And that stocks that jumped high today will jump higher in the coming days. The next resistance levels are 6400 and 6500. At that level, we might see SM at 850 and MBT at 90+. So, given this, what should be our 2-week plan?

I would love to say that it's safe to go long now. Meaning, stop the quick cutloss and stop selling at 3-5% according to our rules in this type of market; hold for longer time periods instead, and probably shoot for 20%.

But I'll be choosing a semi-conservative route. Half of my gtcap was sold earlier on an automatic sell-point set last week (at +6%), this helps me prepare more cash for Thursday. I will also sell some green MBT this morning again to ready higher cash position. And then I will also observe the moves of foreigners more. Even if the stocks that rose already (ike GTCAP, SM, and MBT) surge up to 52-week highs from here on, I think there are plenty of opportunities with other stocks. FLI, FDC, SCC's also have good earnings, but have not yet surged up at this time.

So, Cash is still a useful defensive position at this time. Even if this is now a start of a true uptrend, and we miss some of the equities that already jumped higher, there are still other nice ones (still cheap) to ride in. I recently saw in one presentation that PSE is 60% a listing of fundamentally solid companies. Even if the first 30% already is on an eventual uptrend, we'll still have the other 30%, which we can easily find (our PSE isn't that big yet).

Market Skim Through: Surprise Surge Up

PSEi increased big by +2.76%, to close above 6,300, at a significant 10 B turnover. Foreigners were net buyers at Php1 B. The % increase is indeed high, but not all index stocks were green.

	Stock Code	Last	Change	%Change	Value
1	RPL	13.1000	-3.8000	-22.49%	11,600
2	SMC	65.5000	-7.0000	-9.66%	21,079,783
3	I	2.6200	-0.2400	-8.39%	15,720
4	PHES	0.4300	-0.0300	-6.52%	107,500
5	VMC	1.6000	-0.1000	-5.88%	14,338,980
6	CHIPS	14.0000	-0.8000	-5.41%	51,550
7	ZHI	0.3700	-0.0200	-5.13%	235,350
8	LC	0.4400	-0.0200	-4.35%	28,200,350
9	STR	3.6300	-0.1600	-4.22%	145,350
10	MA	0.0270	-0.0010	-3.57%	13,591,900
11	HLCM	13.0000	-0.4600	-3.42%	65,000
12	BEL	4.7800	-0.1600	-3.24%	96,947,010
13	BKD	1.0700	-0.0300	-2.73%	219,350
14	STI	0.7600	-0.0200	-2.56%	14,125,410
15	MER	268.0000	-7.0000	-2.55%	511,089,210
16	T	2.2400	-0.0500	-2.18%	12,740
17	ARA	1.5000	-0.0300	-1.96%	217,160
18	COL	17.5000	-0.3000	-1.69%	2,765,048
19	SEVN	105.1000	-1.8000	-1.68%	1,398,312
20	SLI	0.6100	-0.0100	-1.61%	323,730

SMC is now officially behaving like a bazur, or a poor-performing second liner like ROCK. It is the 2nd worst performer at - 9.66. I wonder what Ramon Ang will say again about taking SMC private (it is rationale). Will he brandish again the chunk of Meralco he can still sell, just so he can show liquidity?

Foreigners CLSA and Deutsche sold big at closing, and power companies are seemingly hit. MER and AP, for example were positive throughout the day but suddenly closed in the red at closing.  Are these brokers worried about another move by the government ordering another slash in utility tariffs (for electricity this time after water)?

The bulk of the increase in the index was courtesy of SM, MBT, MPI, and SMPH, which all rose big.

	Stock Code	Last	Change	%Change	Value
1	SUN	1.5700	0.1900	13.77%	15,305,640
2	ATN	1.1800	0.1300	12.38%	141,560
3	CDC	1.1200	0.1100	10.89%	5,600
4	EVER	0.2650	0.0260	10.88%	17,600
5	IPO	12.5000	1.1800	10.42%	398,946
6	CPG	1.5500	0.1400	9.93%	45,751,090
7	SM	805.0000	61.5000	8.27%	980,861,995
8	AGF	2.8100	0.2100	8.08%	2,751,110
9	ALHI	23.4000	1.6000	7.34%	64,655
10	APO	1.9800	0.1300	7.03%	1,980
11	NXT	2.1500	0.1400	6.97%	38,670
12	CEB	55.5000	3.0000	5.71%	18,150,905
13	OPM	0.0190	0.0010	5.56%	39,800
14	KPH	4.7500	0.2500	5.56%	28,300
15	MPI	4.6300	0.2300	5.23%	298,078,170
16	MBT	86.0000	4.2500	5.20%	506,718,473
17	SMPH	16.9800	0.8000	4.94%	234,222,736
18	PAL	5.7700	0.2700	4.91%	469,106
19	IMI	2.6000	0.1200	4.84%	391,410
20	GEO	0.4350	0.0200	4.82%	8,800

The 1B foreign buying is small for comfort given that we reached 10 B in total volume (their buy figures are usually higher at this total volume). The culprits are again Deutsche and CLSA, which combined for over 2.5 B of selling. Good thing other foreigners and local neutralised Deutsche selling in SM, for example. And again, a big chunk of the sell-down, of both brokers happened at closing (which, incidentally I think is better than gapping down at opening, because panicky locals frequently follow gap downs with some immediate sell-downs of their own, making a painful chain effect).

All these were surprises. Majority were expecting sideways, low-volume trading, and sell-off by many funds to prepare for the FED meeting. We can only wonder what these funds are planning for near-term (how do they intend to position throughout September) and intermediate (until Dec 30). We must be aware of their moves until Wednesday, and change action plans if needed.