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.

Stocks Im aching to go back to

If Putin's posturing indeed brings our PSE down, 

there could be some benefit to many of us who's holding a healthy cash position.

For myself, a steep correction could allow me to place some bets again in these issues I never lost a bet with (you can call this my Top-5-but-Im-not-currently-holding stocks):

1) MEG -- I'll start entering at 3.73 with one tranche and continue to add even if it struts down to 3.0

2) PGOLD--will start at 38 and place bets until 30

3) AGI--25.9, will add until 20

4) DNL--785 will add until 700

5) toss-up between SCC (290... but improbable to happen) or GTCAP (785 until 700)--

Apologies to those still holding.
Yes, Im wishing for these to go down, but I consider these issues among the most resilient of the past 12 months. They seem to be among the stocks that return back to previous highs (and make new highs). Besides being fundamentally solid, they also seem to return to their 'true' valuation (in terms of growth promise) the fastest way.

There are others that perform like them, but these are the ones I dont have current positions in (and would want to go back to) asap.

Mamingwit sa ilalim vs. maghintay ng breakout

Totoo namang mas delikado mamingwit at manghula na pinakailalim na ang mapupulutan mo, kaysa maghintay na lamang ng breakout tsaka makisakay. Sa pangalawang istayl ng trading, mas may istruktura ang mga gabay. Meron kasing mas mahigpit na paalala na kitilin ang pagkatalo kapag hindi nagtuluy-tuloy ang breakout tulad nang inaasahan. Sa halimbawa ng PGOLD (na isa kong perinyal na paborito pero di na nasubaybayan)--

Bagamat hindi mataas ang bolyum kumpara sa gusto ng mga tagahanap ng lehitimong breakout, nilampasan ni PGOLD ang 42 na ilambeses nyang sinubukang basagin bago pumailanlang na ngayon. Kung bumili ka sa 42.1 noong 10/02, mayroon ka na ngayong mga 8%. Kung kasama naman sa mga natakot noong Miyerkules at nagbenta sa 45, oks na rin ang +7%.

Paalala ng mga tagasunod ng sistema na ito na magkitil ng talo sa pinakamalapit na support kung peke pala ang breakout. Sa kaso ng PGOLD, sa 40 o 38 mag-cutloss.

'Malinis' ang istayl na ito, subalit mas eksayting ika nga ang sumubok mamingwit sa ilalim. Tulad ng totoong isport sa fishing, napakasaya (tingin mo'y napakagaling mo) kapag tama ang hula na ilalim na talaga ang napagbingwitan.

Ang karaniwang guide ng mga mangingisda sa ganitong istayl ay ang RSI. Kapag sumasadsad sa 30 ang RSI, pero solido naman ang kita at kinabukasan ng kumpanya, dapat daw mamingwit na. Sa kaso ng SECB na dinispatsa ng mga pondo dahil sa mababang ulat ng kita noong nakaraang quarter--

--kung bumili ka sa dulong 105, meron ka nang 30%+ ngayon. O kung sa saktong 30 RSI bumili  (mga 118 ang presyo dito), 16% pa rin ang kita. Mas mataba nga ang ganansya at para kang henyo o pinagpala ng maykapal kapag bumili sa isang mababang presyo at biglang tumaas agad mula doon.
Subalit napakahirap nga namang alamin kung talagang dulong ibaba na ang mabibingwitan. Pano kung sumadsad pa sa nuwebe halimbawa ang RSI?

Ang sagot siguro ay, kahit anong sistema man yan, kailangang ang fundamentals pa rin ng kumpanya ang saligan. Tuluy-tuloy pa rin naman ang kita ng SECB at makikita naman sa paligid ang patuloy na pagsulpot ng mga branches ng bangkong ito (nag-eexpand ang negosyo), kaya siguro marami ring pumasok at sumuporta sa bandang 105-110.

Ganon din sa mga sumabak sa GTCAP. Di na kailangang hintayin pa na umabot sa 30 ang RSI sa kumpanyang ito ng mga Ty, solido naman kasi ang Toyota, Metrobank, at Insurance na pag-mamay-ari nito, at pag tinignan ang graph, parang malaki na ang probabilidad na tumalbog sa 750 ang presyo dahil ilambeses nya na ginawa ito noon.

Ang problema nga lamang kapag may matinding bad news sa bansa o sa merkado (tulad ng QE easing), maaaring lumagpak pa sya ng husto. Sa kaso ng GTCAP, umabot pa sa 700 ang lagpak (maiging dagdag na lang siguro pag abot doon).

Alin sa dalawa ngayon ang mas mabisa? Walang aksyon masyado pag hintay lang nang hintay ng breakout. Madalas lang ang kasong ito kapag 'overall uptrend' ang merkado. Kapag ganoon, hindi na nga kailangan maghintay ng breakout, dahil lahat halos (lalo ang mga magagaganda ang paglago ng kita) ay tataas. Kung aksyon ang gusto, ang mamingwit sa inaakalang dulong-ilalim ang magagamit. Ganoon din kapag di kalakihan ang itataya.

Kabaligtaran naman ang sa mamingwit sa ilalim. Bihira naman ito kapag tumataas ang merkado sa pangkalahatan. Madalas, ang mga bumabagsak ay ang biglaang bad news sa pang-araw-araw (halimbawa, ang biglaang paghahabla ng smuggling ka PNX).

Pero pwede namang gamitin pareho. Tandaan lamang marahil na ang fundamentals pa rin ng kumpanya ang dapat saligan. Ang PGOLD ay patuloy naman ang paglaki. Dito rin kami nag-go-groceries ng pamilya. At dapat walang malaking bad news ang kumpanya. Halimbawa ang MPI at MWC sa ngayon--dahil sa order ng MWSS na magbaba ng singil, di pa solido ang sitwasyon nila para hulaang mamingwit sa ilalim. Kasama na ang mga minahan na napakalikot ng presyo at wala pang liwanag ang kinabukasan hanggang di naaayos ang batas sa pagmimina sa Pilipinas.

Alin ang magandang abangan ang breakout sa ngayon? GLO siguro, subalit di ganon kalakas ang paglago ng negosyong ito kumpara sa PGOLD. Pwede rin ang ICT? JFC? DMPL?

Alin naman ang magandang abangan sa baba? VLL sa 5-5.05, AP sa 30 - 31, AEV sa ... magbasa ng forum tulad ng SMP para makasamang mamingwit. Madalas may isang pondo lang na piniling idispatsa ang stock, kaya nagiging parang bargain ito panandalian. Ang sarap talaga kapag nakatyempo ng ganire.

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.