SECB on the run

Two weeks ago, we wrote here:

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 for 3 among MACQ, CLSA, CSUISSE, JPMORGAN [meaning, foreign funds] to buy in bulk again. I'd also like to see WEALTH buying as well.

The two conditions were met today. 

1) WEALTH is buying again, significantly at that.
2) And it's not just three but five foreign funds--DEUTSCHE, CSUISSE, PEP, UBS, and ATR--are buying in bulk. 

The catalyst is the earnings announcement. 

Props for whoever prepared the the press release. It was perfect to emphasize the increase in interest income this year, as opposed to the huge trading gains that lifted SECB in 2012. This means that SECB indeed has its strong branch expansion bearing fruits. The bank has its eyes now competing in loans and deposits with the big three MBT, BDO, and MBT.

And then the chart:

Expect TA believers to buy more tomorrow, because SECB did important crosses yesterday. both long and short-term downtrends have been broken.

Looks like the core position that Ive kept and added to since July last year will bear fruit. Ive taken profit in some of the swings in SECB before, but here should come a bigger chunk. And I think I will buy (buy up!) one more tranche tomorrow until 121. (The only chartist concern should be short-term since RSI is now showing oversold).

Now, why did I stick it out with SECB? I think I mentioned elsewhere that this bank is a good value at current price and it is noticeably expanding branches everywhere.

It's apparent that the firm has a long term growth strategy. It knew it cannot stick by its income in just trading equities and bonds. It needs to expand its depositor base and loan customers, Now, whether SECB will indeed get close to the Big 3 in the next 5 years is another matter. I guess the way to know that is to become a customer of SECB. We'll look into this bank if indeed we decide to buy a house this year. A house? This deserves another blog post. 

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 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.

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.

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).

Pick of the Week for Week 36: careful bets

I was hankering for a positive day today at at least 0.5% and 8 B PhP volume, to make me more confident to place bets this week, but it did not happen. We're negative -0.22 % instead at a small 'Ghost-month' average volume of 5 B. The volatility is also still apparent. If you observed SMPH, and most other blue chip the swings in positive and negative territory are still wild. This, again, makes cash the safest option. (When I last recommended to release cash, I was dumbfounded and proven wrong by typhoon/monsoonrains/floods and news of QE easing).

I am recommending to place small bets though on

1) BHI. Never imagined I'll recommend this notorious bazur that is known to jail many souls, but the risk/reward at this time warrants a small entry. The announcement whether ALI is finally buying Puerto Azul or Panlilio scuttled the deal should happen on or before September 7, (Otherwise both ALI and BHI should be sued for their misleading disclosures regarding nego time frames). Assuming, a deal is closed, I think +30% is minimum, ceiling in one day probable, for that day the announcement is made. I placed a tranche myself earlier at 0.134. I would have entered earlier if I saw the price movement before lunch. Anyway, there was a thick bid at 0.135 at closing, portending that that price level became the support at closing. And Im willing to average down until Sept7 if it goes down to 0.125.
The risk on the other hand is -10%. This would mean Panlilio took us for a ride all along (he is not selling Puerto Azul, after all). So risk:reward is 1:3 at least. If in the best scenario that it reached ceiling fast the first day (additional motivation: traders could still be hungry for that storied bazur a la SUN), I'll sell immediately. I wont be greedy to aim for another ceiling the 2nd day.

2) AEV. A good candidate for range trading again (just do not aim for more than 5% gain at a time).

If the volume remain low as it is today, the up-and-down swings from Jul-Aug can happen again throughout the week, until local Chinese investors wake up from Ghost Month (see caveat below). Also, this conglomerate is cheap today. It's surprising to see it slumped -3.97%-- negative gain!-- in 52 weeks, in the backdrop of unprecedented Philippines GDP growth, which AEV contributes in. The Aboitizes are also known to defend their issues, so expect that protection as well even at lower rectangle range (like 43.5 - 47.5).  

3) you can also choose recovering stocks like SECB and SM, as long as the climb is steady, preferably slow, and not stunted by a big foreign fund selling again in bulk as you observe price movement. Articles are now coming out commenting on how un-warranted this bunch slumped to so low a price, while their fundamentals are very solid, and growing revenue streams are assured in the future. 

But, caveats:

• Remember, these are short-term trade recommendations only. Bets should be divested also within the week. Take profit or cut loss early 
• If you see a threat of a huge red candle early tomorrow (especially if more than 1% negative in the first hour of trading), stay in cash. 
• If the volume is increasing in big hauls (say 4 B before lunch), go back to the solid companies you believe in that reported the highest earnings growth recently. AC, ALI, MEG, JFC, AGI, GTCAP, etc...are all good candidates (re-check their quarterly reports). Disregard the bazur, unless you are adventurous and fully focused on monitoring its price. 
• Remember, although they are already fighting each other (again) on some stocks, foreigners are still net sellers the past weeks, even on the days we are positive. We still need to be on our toes watching their moves. It also still pays to watch foreign markets (DOW is negative as of this writing). 

Remain cautious. Do not go all in.

Market Skim Through: July 24. GERI is active and green, AGI flexing true strength

Another green index today, jumping 0.9%, ending at above 6800.

GERI is a non-blue-chip and, judging from its terrible price movement the past few weeks, a prodigal daughter of AGI. But it interestingly came inside top 20 most active today, and with a big green candle at that. Top buyers are locals (Macquarie is a top buyer but a net seller nevertheless). Are local fund managers starting to take in GERI as part of the speculative bet in their portfolio? Most mutual funds and UITF are composed of 30 issues, and many managers include strong 2nd and 3rd liners in the pool. GERI could be a good bet, considering it is near oversold. While it suffered one of the steepest downturn in the past few weeks, it is still a promising company showing +30% increase in income, and one of the Andrew Tan's subsidiary  earmarked for expansion as they set their sight, as disclosed, on riding the increasing tourism in the country.

The mothership, AGI, was the top most active and also the leader of the index issues. This one stock that did not suffer much during the sell-off is now the first one to return to its level when the index was at 7000+. There's indeed a theory along this line--that the issue that suffered least in a correction (or bucked the trend of a major correction) will also be the strongest when the market recovers. Ah, should have kept my considerable position that I sold last week at 25.8. But if AGI should continue strongly, MEG, ELI, and GERI should follow (I have positions in all 3).

COSCO was also remarkable today. When I see this type of jump, my stubble beard tells me Lucio Co is eyeing another venture. Will he really take over the local franchise of Wendy's?

SECB recovered at last, probably due to this positive news.

http://www.philstar.com/business/2013/07/24/1004831/asiamoney-names-security-bank-best-domestic-bank

But the higher-impact news, I would say is when they announce ex-date for their committed stock dividend. Anyway, my buys for average down yesterday and early today worked. I hope momentum will take price back to at least 170. If movement shows weakness, I intend to cut some position hopefully at above 155 at least. Hard to think that this used to be at 200 +, and chartists were saying its blue skies forward back then). SECB was also once a foreign fund favorite. Will locals take the baton and bring it back to 200?

Interesting high volume also for MER, MPI, TA, ICT, but all are dojis (no price change). Best to study these four further.

No.	Symbol	Last Price	Change	%Change	Volume	Value
1	AGI	27	1	3.85%	26,246,900	707,547,245
2	COSCO	11.2	0.56	5.26%	47,936,600	530,377,276
3	SM	960	10	1.05%	460,290	441,229,990
4	TEL	3,078.00	-22	-0.71%	124,345	383,749,800
5	ALI	31.4	0.5	1.62%	12,109,300	379,110,815
6	BDO	85.95	1	1.18%	4,236,930	364,132,088
7	MER	285	0	0.00%	1,197,140	341,469,506
8	AC	640	10	1.59%	526,130	335,826,685
9	MPI	5.39	0	0.00%	61,503,700	331,239,782
10	URC	129	3.9	3.12%	2,504,120	322,688,635
11	SMPH	18.98	0.5	2.71%	16,404,500	307,572,916
12	PGOLD	41	1.05	2.63%	7,148,200	288,164,145
13	MBT	111	0.3	0.27%	1,705,100	189,654,185
14	MEG	3.56	0.06	1.71%	52,834,000	187,211,500
15	SECB	146	6.7	4.81%	907,420	130,376,847
16	TA	2.72	0	0.00%	45,263,000	124,454,470
17	ICT	93	0	0.00%	1,281,930	119,354,863
18	GERI	1.73	0.11	6.79%	67,536,000	112,207,640
19	RLC	23.3	0.3	1.30%	4,470,500	104,013,750
20	MCP	10.1	0.08	0.80%	10,310,400	103,897,796

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!

Market Skim Through: July 23

A good green day today after President Noynoy's SONA, although I'm not sure whether or not investors, more so foreign investors, were really glued in front of their television (or laptop or monitor or tablet, etc), taking notes of that one speech. And if that speech really moved us to click buy today.

In any case, TA, soared on the disclosure of property and cash dividend. Take note that this cash dividend is on top of the 0.04 from just a few weeks ago. And this property dividend is not at the level of a rumor any more, since it was also disclosed weeks ago. (More on TA on another post). 

This rise gave my portfolio a big boost, glad to see my paper loss drastically reduced, and recovering.  

MPI was also a good ave down move for me; was correct to anticipate that the market will interpret positively MVP's move to strengthen foothold on MER (by buying some from SMC's). 

#	Stock Code	Last	Change	%Change	Value
1	SEVN	120.0000	19.0000	18.81%	297,243
2	AB	23.9000	3.4000	16.59%	1,018,855
3	ALPHA	46.5000	6.5000	16.25%	11,768,785
4	PERC	7.0000	0.9000	14.75%	700
5	SPC	5.5800	0.6800	13.88%	5,580
6	TA	2.7200	0.3200	13.33%	218,118,710
7	ATN	1.2600	0.1000	8.62%	269,000
8	UPM	0.0130	0.0010	8.33%	356,200
9	BCB	9.3000	0.6000	6.90%	6,360
10	SPM	1.7600	0.1100	6.67%	8,440
11	AAA	3.2000	0.1900	6.31%	226,340
12	SLI	0.7100	0.0400	5.97%	1,186,610
13	MIC	5.9200	0.3200	5.71%	504,755
14	LCB	0.6200	0.0300	5.08%	13,816,770
15	SUN	0.6200	0.0300	5.08%	1,664,060
16	MRC	0.1050	0.0050	5.00%	112,000
17	BKD	1.0800	0.0500	4.85%	608,910
18	MPI	5.3900	0.2300	4.46%	329,076,012
19	ACE	1.2000	0.0500	4.35%	132,900
20	PIP	5.8600	0.2400	4.27%	10,894,446

MBT, however, have a lukewarm performance. But I still believe in this pick of the week.We gave this stock two weeks.

SECB, traded at a very high volume, but at a loss! Some funds are obviously unloading. I averaged down at what I thought as the bottom (reading from the chart), but it went down one peso further that bottom. It's too late to cut loss for me here. Will just continue to average down, and hope that the ex-date announcement of its impending 20% cash dividend will jumpstart this stock. I just hope there is no negative insider news that is already circulating elsewhere in the financial houses' grapevine.

ROCK, also continuously being a disappointment. Probably the only second liner property issue that is still not showing any strength! Better to just stay dormant, ROCK, as you did for many weeks, rather than shed more of your value.

VUL, will not be a buy for me until late this year when the Ramoses get their act together, and concoct a solid plan on how National Bookstore will be infused in the security. More on VUL on a later post.

#	Stock Code	Last	Change	%Change	Value
1	MJC	2.0100	-0.1900	-8.64%	16,350
2	CA	55.0000	-4.9000	-8.18%	2,849
3	GREEN	0.0150	-0.0010	-6.25%	1,835,800
4	SHNG	3.1000	-0.2000	-6.06%	151,900
5	I	2.7900	-0.1500	-5.10%	2,790
6	2GO	1.7000	-0.0900	-5.03%	42,500
7	ALHI	23.4000	-1.1000	-4.49%	530,910
8	CLOUD	6.6000	-0.3000	-4.35%	26,400
9	PCKH	11.5000	-0.5000	-4.17%	57,500
10	IMI	2.5000	-0.1000	-3.85%	285,310
11	ION	0.5200	-0.0200	-3.70%	8,820
12	VITA	0.8200	-0.0300	-3.53%	255,420
13	ROCK	2.1000	-0.0600	-2.78%	9,185,970
14	AR	0.0036	-0.0001	-2.70%	36,000
15	SECB	139.3000	-3.7000	-2.59%	513,118,838
16	ZHI	0.4200	-0.0100	-2.33%	1,828,950
17	GMAP	8.8000	-0.1900	-2.11%	52,800
18	VUL	1.4300	-0.0300	-2.05%	294,470
19	PAL	5.6400	-0.1100	-1.91%	1,236,635
20	LMG	2.6000	-0.0500	-1.89%	79,680