About PSEi threatening 7400 (two weeks ago), TEL, and unsureness

I've sold my last holding that was showing double-digit gain two weeks ago. Ive been able to harvest that one big winner, TEL, because Ive been holding and averaging down on it even when the issue dipped down to 2600 levels last year.

I began selling when it threatened 3K earlier this year, when I thought it will hit a big resistance. I continued to sell in tranches until just a portion remained. Of course, if I had insider info that TEL will benefit an MSCI rebalancing, I would have held all and then sold in one chunk instead. But I dont have that foresight, and I was comfortable with the +5%, +8%, +10%, then +17% (for the last tranche) profit even if it goes up further from hereon.

Another reason that reinforced my decision to sell is the impression that too few (to me) stocks are taking the index up. It was noticeable that a only a few highly-weighted issues are taking our index higher. Unlike the surge last year when almost overwhelming number of issues were hitting 52-week highs left and right (even second liners like ELI and ROCK were being bought up to record highs early last year), the index increase today could just be funds training their guns on less-than-10 specific stocks.

This should bring unsure-ness, but if you have faith in fundamentally-sound stocks that are stil showing strength (like SECB), there might be another +17% around the corner to enjoy.

Pick of the week for Wk38 is GLOPP. Watch also FLI (buy at 1.45 if this reaches this price)

I didnt expect a preferred stock to trade at this high volume. (Look at Ayala's and the preferred stocks of others, which has zero volume daily), but local funds might have decided to park funds according to the dividend promise of this issue. There could be a +5% here in short term. (Disclosure: I bought a chunk of this issue at offering price, when I was looking to park some excess cash in). But--enter cautiously. Im still not sure about the overall market sentiment. There's net foreign selling the past few days, and many are saying that the index increase today is just technical bounce (a temporary respite from being down consecutive days).

Im also observing FLI. It's a definite add when it reaches 1.45. I like fundamentally-sound, good-current-P/E, second liners like FLI, which also pay generous dividend (at least 4%) annually. If you get stuck, at least you can count on some income.

FLI is definitely better than CPG (which is a good peer for comparison) in this sense. Although I also already entered CPG again at 1.28...

Ukol kay DNL

Isa itong si DNL sa mga hindi ko na nasubaybayan, dahil sa kakulangan ng oras sa pagtutok, na sanhi naman sa pang-araw-araw na pagkakayod (kung di sin sana'y full-time na lang sa pag-te-trade, pero pantasya pa lang yata ito ngayon sa pinas).  

Subalit matagal ko nang kilala ang DNL, Oleofats, Chemrez at FIC, dahil na rin sa arawang hanapbuhay ko.  Naririnig kong ipinagyayabang ng mga minsang kahuntahang manedyer nila na, sa niche ng mga negosyo ng DNL, ay kakaunti pa lamang ang totoong kakumptensya nila. Totoo naman. 

Sa Chemrez halimbawa, na nagpoproseso ng mga virgin (hindi recycled) na resins para sa mga plastik--na gagamitin naman paglaon para sa mga upuan, lalagyan ng pagkain, bumper ng sasakyan, kutsara't tinidor, atbp.--ay yaong subsidiary pa lang din ni Gokongwei (JG Summit Petroleum) ang nag-iisang kakumptensya. Ganoon din si FIC na nagsusupply ng additive para nadudurog ang mga plastic bag ni SM kapag nabilad (oxo-biodegradable), at nang maka-comply ang plastic bag sa mga ordinansang pabor sa nadudurog na plastik (para di magsanhi ng pagbaha). Kakaunti pa lang din ang may teknolohiya (o partner) para may kumalaban kay DNL dito. 

Samantalang sa bisnes naman ng paghahalo ng kung anu-anong recipe at flavors para sa mga restoran, kailangan nyan ng lubos na pag-aaral, kagalingan. at kaalaman para makapasok ang kung sino mang gusto manggaya o mangumpetensya. Kokonti pa lang din ang nasa larangang ito. Minsan ngang nagyabang ang isang manedyer na ipatikim lang sa kanila ang gustong gayahing manok, aba, magagaya raw nila ang marinate, pati ang breading.

Wari koy'y pinapadala rin ng mga Lao ang kanilang mga emplayado para mag-aral o magseminar o mag-benchmark parati sa ibang bansa nang hindi nagtitipid, taliwas sa aasahan sa isang korporasyon ng mga Chinese. Hindi rin sila takot tumanggap ng mga inhinyero at ispesyalistang galing sa akademya. Nandoon na rin ang pagpabor ng mga Lao sa mga Fil-Chi. Sa isang miting, mapapansin mong nag-uusap ang lahat ng Fookien o Mandarin parati ang mga tao dahil halos iisang profile silang lahat. Hindi rin perpekto ang polisiya at diskriminasyong ito, subalit isa siya sigurong pinasimpleng paraan ni Lao para makakuha ng mga empleyadong bata, marami pang enerhiya, at may malasakit sa misyon at vision ng mga negosyo ng DNL. 

Mga mabilis na halos trivia lamang ang mga ito na ginamit ko mismo para mamili nang mamili nang DNL maski noong sumasadsad sya sa sais. Ang prublema lang, naibenta ko na lahat sila bago mag-diyes. Naniwala akong babagsak muna sya ng malalim bago lampasan ang diyes. Biruin mong, makailang linggo lamang, tumitira pa ngayon nang pa-kinse ang DNL. Parang si Curacha na ayaw magpahinga! 

(walang dudang mali at masyadong maaga ang pagkakabenta nang tatlong beses. pero oks na rin ang kita. nabili ko naman sila sa ibaba ng siyete)

Itong DNL dapat ang sinasabi ni katotong turmukesh ang makakatulong kung gusto mong talunin ang ganansya ng indeks. Di gaaanong kahirap talunin ang ganansya ng indeks dapat, kung naniwala at tumodo sa iilang solidong kumpanya tulad ng DNL. Hindi siya ganoon kahirap basahin ang kanyang pramis, maski noong nakaraang taon, kung tutuusin. Halos hambog na nga ang dating ng mga press release ng isang ito. Kung naniwala at tumodong 50% ito ng portfolio mo, daig mo na agad ang indeks ngayon. Yung nga lang, sa aking kaso, nakabenta lang nang maaga.

Ngayon, ang tanong--oks pa ba bumili ng DNL? Oks pa siguro kapag bubulusok pa ang indeks papunta sa 8000. Ibig sabihin, kung naniniwala kang ang sentimyento sa PSE ay sobrang positibo pa para itulok ang indeks sa 8000, bili ka na dapat ng DNL.  

Pero para sa akin, hanap muna siguro ako nang may 5% at makasundot nang kita sa gilid-gilid. Parang ang MBT halimbawa ay dapat madaling sumulong sa 91 ngayon galing sa 86.

Parang trip ko na rin mambasura saglit kung positibo naman talaga ang pangkalahatang sentimyento sa merkado ngayon. 

Yun ay kung may taym mag-monitor. Wag mambazura pag walang taym. 

Contemplating for the next 4 weeks

After two weeks, got to assess positions only now.

The last two weeks have been good. Might have sold too early some partial tranches in JGS and MEG, but I still have substantial position in both in my other port. Only the cut loss of MER seem as the one mistake. Cash position increased to 45% when my sell points in ANS was hit. I averaged up in MBT and added some in FDC and AEV last Friday to return to 30-35% range.

Also in my other port, a minor blunder was in playing, although small, with LC, but Im still holding that. 0.4 seems to be a very strong support for this once-index component.

Im now looking at the following:

• BEL and MCP seem to be amping up in the press its strength with having the Hos as operators, and their existing junket system with high rollers, as predicted. I sold all my BEL with a small gain at 5.1 two weeks ago. If this breaks 5.4, Im getting in again.

• TA seems ready to go up again to 5.4 (minimum), but I have already a substantial existing position. wont be adding more.
• DNL seems eager to return as well to 7+, but I hope to see more volume.
• Im looking for some possible cup and handle formation (I believe in this Technical Analysis pattern, if only because it seems to be based on probable human psychology especially apt for after a downturn. If you dont know the pattern yet, best to google about it and read).

• The main Sy stocks--SM and SMPH--might fit this pattern before going back to their high June prices. 
• JGS might also exhibit cup-and-handle before going back to 45+. The IPO of Robinson's retail might also bring some influence to prod it to breach 50+, but I'll be contented to start selling at 45 - 48. 

• TEL appears wanting to go down next week. I'll be buying starting at 2830 again if it reaches that level.  
• Properties appear ready to go up in unison. Have to have in watchlist VLL, ELI, GERI, ROCK, and CPG. These companies have good income growth this year, and they are far away from their 52-week high. I'll probably buy into the one that show good strength on Monday, but among them VLL might only be the one for long term.  

Will make my pick of the week on Monday among these mentioned stocks. And that pick's hold time frame will be for minimum within four weeks. 

Range-trading during a period of uncertainty

As Im writing this, PSE index is only 4 points away from 6800. Many 'investors' that were left holding the bag at above-7000, those shell-shocked by the sell-down of foreign funds last month, are starting to smile again. Im partially one of those investors. I chose not to cut loss, or I did not cut clean on most positions, and was only able to 'save' about 20% of my cash. That obviously was a bad move.

But I elected to pool a smaller fund, open another account in another online broker (to sort of start in a clean slate), still trade actively during the uncertainty, and focus on a few securities only, with two criteria: no bazurs (no BHI, no CAL, no TSI, however hyped they are in forums) and no lightly-traded security (no ANS, no SGI).

I profited a good +6.3% (of capital) taking advantage of predicted range trend in MBT, GLO, TEL, DNL, SCC, and VLL and partially (small one-time impacts) in ABS, BDO, ALI.  For example, I was able to go back and trade TEL four times, in the span of 4 weeks. I bought in tranches at 2830 and prices below and then immediately sold whatever I accumulated at 2930ish--no questions asked.

I would like to think that Im an expert with these moves that are suitable in an environment of volatility, but in truth, as most transactions in the stock market, these are all just bets. There were some rational bases, but luck (more like winds going in your favor) still is the bigger factor.

Nevertheless, if you ask for the bases and rules that I used, . Here they are:
1) took on faith that TEL and others are solid companies that is undeservedly cheap at their prices at that time, especially because there's the backdrop of an unusual, severe sell-off. For TEL, below 2830 was my set price. MBT and AEV at one time went below 10 P/E. And the circumstances (caused by merciless sell-off) were abnormal; these should not be their prices as normalcy returns.
2) forecasted that big bulls and bears are going to fight during that time of uncertainty, so small-time investors can benefit from their tussle.
3) when you observe even the daily trade, volatility was apparent. you can place a bid on the perceived lowest before price jumps again and then return to same number (some call these levels true 'strong' supports) in these daily trades and aim to exit in 3 days.
4) for GLO and TEL, I also relied on the fact that these are high-dividend paying securities, and that this fact would also be in the mind of players foreign or locals alike. Remember that if dividend yield of a stock is 4% of its price, you can be comfortable easily a loss < 4%. We know that GLO, TEL, SCC, Aboitiz stocks, MER, are generous in giving out dividends.
5) also held on to our recent gdp announcement --  +7.8%. You dont see that gdp number brandished every day at any part of the world!
6) also disciplined myself to be at least 30% on cash at any given trading day. At one point, after a previously-set sell points on two big positions were hit while I was on a beach, I was only 26.66% invested.
7) buy in tranches, ready to average down if needed. If your revolving capital is 1 M PhP, buy in amounts of 20 K - 30 K PhP. If 500 K PhP, buy in 10 K - 20 K PhP tranches. This is also optimum to avoid inefficient transaction fees.
8) lastly, again... no bazurs , no lightly-traded stocks.

So there, the reasons for my big gains in just 5 weeks.

But, as a caveat, there were downsides and mistakes:
> VLL, TEL, DNL, GLO, have now increased significantly since I last unloaded them, so there are still that couldve-been shouldve-been imperfect calls, bottomline. No remorse from my side, but trend traders would surely fault my method for not taking full advantage of the trend.
> I also made a mistake in buying and averaging-down on GMA7. The media stalwart aligns with #1 and #4 conditions,  but not #8, GMA7 is a non-bazur but it is very lightly traded nowadays. So this bad move was caused by not following set rules completely. Matigas lang talaga ang ulo (inborn stubborn).  
> MER was also a mistake, but it was caused by extraordinary circumstances prodded by SMC.
>> BUT Im still holding Kapuso and Liwanag. The loss in both after averaging down is not even 4% at present. So obviously, these are not staggeringly as bad a move in terms of impact.

Although, again, on hindsight, these are gambles. 'Expert' traders (like CANSLIM practitioners) will tell you never to come in when there is no clear market uptrend. However good the individual stock is, it will get pulled down by negative sentiment. If the volatility had a downward bias on medium term, if Bernanke firmed-up on his decision to ease QE by end of the year and did not become sheepish on his most recent testimony to the US Capitol, I could have been holding another portfolio set showing nothing but paper losses.

Good luck with your trades. The battle continues.

My pick of the week for Week 30 (July 22)

My pick of the week for this week is MBT, for the following reasons.

1) Metrobank is acknowledged within the top 3 banks and within striking distance to claim top spot from BDO or BPI, but it's surprising to see this security cheap at 10 P/E

2) There is an impending 30% stock dividend that can easily jack-up price by 5 - 8% in the week that the ex-date of this hefty payoff is announced.

3) I see FAMI's fund managers better than BPI by a mile (what's with BPI's High Conviction Oddyssey Funds), and MBT's services and online capability at par with with BPI. (although mbt's ambiance inside their branches seem gloomy. Perhaps its the Chinese frugality seeping in a bit).

4) MBT is starting an upward trend channel, however shallow the slope is. If it breaks 120, chartists will recognize it as breakout, and they will come in droves.

5) It is also now touching 20-day SMA. Some chartists ready with their test buys to enter tomorrow if MBT delivered a strong showing at +1% or more. This will add to overall attractiveness of  MBT.

6) There was a big bullish volume last week, led by foreigners. My bet is they will try again one day this week.

7) Decent increase in core net income q1 this year vs. q1 quarter last year. This is a fundamentally solid bank. If we do CANSLIM, the only thing missing is a remarkable 'new' product (or would this be the first ETF?) and the overall market uptrend of PSE (Moody's, where are you?)


TRADING PLAN:

I think buy price at closing (108) last Friday was a good entry. If it goes down to 106, I will double my position. At worse, if it continues to go down, I will continue to add up until 99.8.

If there's no aberration (like a fund eagerly unloading for some reason), I believe It wont be difficult to see +5% any day within the next 14 days, but it will be up to the person if s/he would take profit after seeing this 5% or hope for a breakway towards 120-130 range. My suggestion is to get profit, range trade, and be safe until we are on a clear market uptrend.

I was already able to profit considerably from MBT last week with double tranche at 110, then 108.5 then 109, then sold all at 113.9 at automatic trigger (the volume last week was unremarkable; I was not on my table when foreign buy-up suddenly started one afternoon). Ive set 114.8 sell trigger (because of the upward channel) for this round, but if I see strong buy-up one morning, I'll cancel it and re-set to 119. But if overall psei movement is too volatile or volume is sluggish, divesting even at just 113.9 again is ok with me.

Again, I think MBT is very probable to show +5% (from 108 closing last Friday) in one given day in the next 14 days. Grab the chance to profit, but dont pour in all your cash. Place a medium bet, then add in tranches if it goes down marginally. You should be able to sell all in two weeks.