Another memorable June in the offing

We wrote here to watch out for the GDP announcement on Thursday. If we were asked to bet then (early in the week), we would have placed money that the GDP increase will be between 6.5-7, but the report was below 6 instead. The damage of Haiyan is still being felt.

And so the result of the less-than-desired report: intermediate moving average of the index was breached (see the purple and orange line crossing on the 2nd graph).

I really chose to go out of an office meeting around 11am, went back to my cube quickly, opened interaksyon.com, saw the not-so-good NEDA report, opened the brokerage, and immediately saw red nearing 1%. Without emotions, I unloaded many positions until my main port is 60% cash, and nimble port to 75%. We also 100%-redeemed all our equity-based UITF's (all of them green). Then, I went back to the the meeting. Friday, I didnt have time to trade or even open brokerage account for a minute, but I know that it was very probable that we're red also that day. If we have shorting in PSE, I would have done day trading and shorted the previous high-flyers for sure.

Today, I was surprised to see the 16B volume and the persistent foreign buying of their respective pet stocks on Friday. Looks like the foreigners are remaining steadfast to each of their pets. This brought optimism in many locals. Will the foreigners impede a general bearish trend?

In any case, down or continue upwards, we are in to another memorable June. Our short-term reco though is not to fight it. The safest move is to maintain a robust cash position. Remain only in a few issues you truly believe in.

Im still holding a significant amount of SECB, some MBT, some LRI, other old (long-held) holdings, and other dividend payers. I still hold and intend to accumulate BEL with the impending opening of the City of Dreams casino. Also, a one tranche in BPI became two when a low-priced buy position (previously set) was surprisingly hit last Friday.

In the end, if we go down, we think this is just temporary. If NEDA is pointing to Haiyan as the culprit, that can be solved. If we manage the aids well, as they did in the tsunami hit places of a decade ago, even the Haiyan-hit areas should go back stronger. I will start to buy again at 6500 probably and continue to go buy even if we go back to 5500.

But if there is an impending BSP policy rate increase, that will be another matter. The ride down will be deeper and more painful if policy rates increase. It's time to add to bonds-UITF if that's the case.

Pick of the week for Wk23 is watch out for the GDP announcement on Thursday

Anything near 7% will take our index on an uptrend. How long of an uptrend? We dont know. Only important is to know that we will profit in 2-3 week horizon, so it's good to ride it.

There's a big probability that we will breach this, so it might already be safe to enter small tranches in your 'reliable' blue chips that experienced some downtrend.

Im looking at FLI, which appears to have consolidated enough on its current level.

I havent checked the foreign selling in PGOLD, if it has already abated. But at present, I already like how the valuations of GTCAP, JGS are becoming more attractive.

I have no time to monitor the market and actively trade, so Im always putting a 'margin of error' in my buys. But for sure, I'll try to squeeze in time (whether to buy or to sell) after the GDP announcement on Thursday.

Good luck!

Pick of the week for Wk22: is to watch index break 6950 then buy a blue chip of your choice, like BPI. Watch also PGOLD

The SECB that I bought last week as pick of the week is now showing +3%. I will hold this and will probably sell at +5 - 8%. 

Im now watching the index in general and see if there will be convincing breach of 6950 (or more so 7000!), then realign--sell some of those with high % gain (like MBT) and buy those that still has room vs. its 52-week highs. 

I havent had time to look at all the blue chips, but BPI it seems still has room. 

PGOLD is also in my watchlist. I'd like the foreign selling to dissipate at 40. I will start one tranche at 40 and increase double tranche at 39, triple at 38, and so on. I wont be afraid even if PGOLD becomes 50% of my port. I know that the disclosed income of PGOLD for the quarter is disappointing, but still the branches and low price, bare bones strategy,  of this company is well positioned, in my book, to reap the consumerist attitude of our OFW families. My biweekly groceries also remain at Puregold. 

Binebenta ng mga banyaga ang PGOLD at COSCO

Huwag muna siguro labanan. Ayon nga sa CANSLIM, hindi dapat nilalabanan ang mga naglalakihang pondo.

Hindi natin alam kung ito ay dahil sa napipintong pagpasok ng Duty Free bisnes ni Lucio sa loob ng Puregold. Masyado bang malaki ang balwasyon ng bisnes na iyon, at ayaw ng mga mananayang higante?

Wala akong Puregold o Cosco sa ngayon, pero bibili ako nito negatib momentum man kapag umabot sa 39 o 38.50.

Net Foreign Selling Na Tayo?

"Foreign selling at 0.6B," ang report nga palitan kanina. Isang buwan ko yatang hindi nakita ang sumatotal na nettong pagbebenta ng mga banyaga. Ano kaya ang kanilang sinimulang bitawan?

Tandaan, sa CANSLIM, ang katumbas ng I - Institutional support sa PSE ay ang pagbibili ng matatapang (kapag gustong pataasin) and walang habag (kapag gustong pabagsakin) na mga banyaga. Kailangang makiramdam sa mga susunod na araw kung ano ang mga istaks na nawawalan ng suporta ng mga banyaga. Hindi sapat ang aksyon kahapon lang, kailangang magmatyag nang mga limang araw man lang.

PERO bagkus, ang aking posisyong-salapi ay nasa halos kalahati, kung kaya't naghahanap rin ako ng maiging paglagyang matibay na kumpanya na pansamantalang bumababa dahil kinukuhanan ng kita ng mga panandaliang-aliw na traders. Kasama rin ako dyan sa mga benta-kapag-+5% an ang ganansya makailang buwan lang nakakaraan. Sa ngayon, gusto ko kasi double digit man lang bago humamig. Iba kasi ang ihip ng hangin ngayon...

SUBALIT sa huli, kanya-kanyang pakiramdaman at basa sa kumpanya pa rin lang yan.

Pick of the week for Wk21 is SECB, and wait for handles in DNL and BEL

I dont have much time to check on the market and review several issues. But I peeked earlier and saw that SECB still has four foreign buyers vs. only 1 foreign seller. I think SECB has 4-6% more steam before correcting.

Never thought I can go back to BEL in my nimble port after previously-set play at 6.03 was hit, but [again another previously-set] buy at 5.7 was hit. I intend to accumulate this even if it goes down to 4.5. And my main port already have a position in BEL as well (at average entry of 5.5).

I would like to go back to AGI, MEG, and DNL, but only DNL seems to be trending to a correction.

The rest of my blues, Im just holding. There's still a big chance that we'll get to 6900-7000 range in a few days.

No Pick of the Week for Wk20: Turmukesh was in China for Work / Official Business

I did not trade the whole week, but a little of my sell point previously set was hit.

Ive been going to various part of this Capitalist-Communist mongrel of a country twice a year, and every visit I become more and more convinced that we have a long, long way to go before declaring ourselves the next developed Asian country.

It's very obvious that we need to fix the bureaucracy in our government, install better managers, and do effective infrastructure and city planning even before we really get to leap frog or even sustain 7+% growth rate year on year.

Can we build the many bridge options and wide roads? Can we convince the offices to move out of Manila in favor of Sta. Rosa and other many Makatis of the South, North, et al?

Can we have the political will to use cheap nuclear power?

The Filipino craftsmanship can compete, but China's level of automation has reached a level very high, even in job-shop industries.  

We have a big gap to close. We need good managers in the government. Good managers, each with protected integrity.

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. 

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.

Pick of the week for Wk19 is cash (but enter already a small amount on some issues, when they hit good buy prices)

I was not able to open account the whole day, and was surprised to see 1+% in negative, I think it's not worth it to bet big this week, unless there's going to be a big push upwards by tomorrow or Wednesday. In fact, I was hoping for an Obama-induced positive, but it did not happen. So the general recommendation this week is to stay in cash. My nimble port is at 60% cash position, my main port at 30%. I have taken in profit that can serve as war chest if there is a need to cut loss, but I'll be on averaging down mode on most issues that I still hold (like TA) even if we tumble down back to 5900.

Also another point of view to consider...
although we are going negative, the volume is small. There is hope that our issues is just forming handles and being relieved of overall overbought conditions.

THUS

It is worthwhile already to enter in minimum tranches some issues when they hit a good buy price. On top of AGI, MEG, DNL, PGOLD, and issues that I mentioned recently that I want to go back to (with target prices indicated in a previous post), Im entering one tranche in SMPH at 15.5 (this might be hit tomorrow), and would average down to 15, 14,...

AP is also worthwhile to look at.

Trans-asia .... to hell and back

My two portfolios (one nimble for short to intermediate trading; and one main (for intermediate to long-term) )  have so far beaten the index by a wide margin. One of the big contributors is because we decided to stick it out with Trans-asia. 

It was like going to hell with Trans-asia late last year, when WEALTH and other funds decided to sell-down brutally the issue the moment that the news about a partner's abandonment of the drilling in Palawan came out. 

From a 52-wk high near 3.0, it tumbled down to 1.4, which means the stock shed more than 50% of its value. Even when it was hovering at a high of 2.4, just before the plummet down, still almost half of its value was lost. It was a hard splat, making those of us remaining in TA needing the price to double just to break even.

Possibly, part of WEALTH's purpose that time is to see how low can TA go before it's good to buy back. But still, I bought and bought until at 1.88, 1.55, 1.5, 1.43, etc mainly because I can not understand the big weight that WEALTH put in the one area of TA's business. I thought TA's management already has good foresight that the petroleum arm of the company, and its risks, may compromise the view of the market toward the whole company, so they announced early on that a separate company will be listed and gave away future shares as dividend. There was sincerity here that you cannot see in many company. I also cant imagine the other partner in the drilling abandoning the project altogether.

From a very deep bottom, TA has come back +70% starting when it was announced that the drilling project will continue. I have been selling only gradually the huge position that Ive accumulated. And now, analysts are harking left and right that the target price of this issue is 4 PhP.

I still have substantial position. I may sell half as our index nears 7 K, and retain sizeable core shares for long term (3-5 years). I wont leave this resilient stock. Its opportunities for growth is very wide. And I owe a lot of gains last year and this year to TA. This has a bright present and future.

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.

Pick of the Week for Wk18 is BEL

BEL is the pick of the week for intermediate term (hold until Q4 2014), for the following reasons:

1) BEL still has room to increase vis-a-vis its 52-week high. It stayed above 6 for more than a month, which tells something about its true base value assuming the casino is already open.

2) it is a relatively 'safe' bet in small tranches/ Even if it goes down with a sudden negative market sentiment, we know it has an upside as its casino is nearing opening in Q4. Yes, it's better to wait until Q3 to invest here, but by that time the price might not be as 'cheap' as it is today.

3) It was already explained elsewhere in this blog why BEL's business model is attractive in its uniqueness. The company is almost guaranteed to show profit year on year beginning last year.

Technical Analysis and Multiple Trendlines

As most of the readers of this blog knows, Im not fully into Technical Analysis. I like more 

1) the news (especially if my current disposition is that of a short-term to intermediate trader)

2) balance sheet and p&l statement, 

3) the caliber of the CEO and other executives of the company, 

4) the current price of the stock compared to its growth potential, 

5) and the inherent growth story of the firm 

to speak for themselves. 

I also try to make myself aware of foreign buying. 

But TA believers would say that the chart should be able to reflect all these. Meaning the sentiment on fundamental and management should all be in the chart. I dont agree. 

Within the chartists sphere, these have some weight on my buying or selling moves:

--the cup and handle patterns is based on a solid psychological nature of humans, so Im on the lookout for this pattern always. 

--simple moving averages at 50 (for short term) and exponential moving average at 150 or 200 (for intermediate). I also watch these because many chartists are supposed to buy (or sell) in droves when these are broken. We of course want to ride with them, and hopefully pluck some short-term profit. 

--RSI is okay as a guide if the increase or decrease is fairly gradual. A jerky increase up and down are more news or hype-based; RSI is invalidated in these cases. 

--spikes in volume are also very meaningful. 

--psychological supports and resistances (especially if the number converges with a moving average) also appear valid, especially on large-volume traded stocks 

--if i know i will have time to monitor short-term trading (where, win-or-lose, I intend to sell back the same position that I bought in  to 3 weeks), I also check candlesticks.  

One TA area that appears iffy to me is the turf of trendlines. 

A famous chartist getting paid for his analysis (selling subscription) was spouting last year that our index will reach 8500, solely because of the black, purple, and moss green trendlines that are supposed to be pointing upward of 8000. Those to me seem arbitrary, especially since the P/E of our index was already a very expensive 20+.

And then beginning on the sell-down last June, an infinite number of triangles and lines can be formed, almost at leisure. Could trendlines be nothing more than pastime for investors, as kids enjoy drawing sketches and figures on their play time?  

In any case the most optimist among us should be happy that chartists should be joining the buying today since there appears to be an upward channel that formed early this year (see the two short parallel lines on the far right of the chart below). 

Speaking if channels, TEL is supposed to be on an upward channel Oct 2012 to near July, but it was turned into a 'confirmed' downward channel since June 2013 to February 2014. But an upward channel can also be simultaneously from last November 2013 to present. So even with channels, there are multiple readings possible. 

Anyway, there's no use becoming snobbish of methods. I would agree that the best compromise is to choose a 'pet' based on present value and fundamentals (or 1 to 5 above), and then use TA to decide on the moment when to bet high. In short, choose a company that you will trust and then read some chicken intestines to reinforce the decision when to make big bets or... cut loss for that matter. 

No pick of the week for the shortened wk 17

I sold all my long-held PNX for a hefty 7.5%+ profit. Unloaded most of SGI (also long-time hold) at considerable profit, and let a minimal position caught in that sell-down. Yes, not all big upward trends come in threes. 

In all probability, I thought SGI will rake in at least +30% again today, because SGI went ceiling very early yesterday. But no, it tumbled down hard! Anyway, if nothing happened tomorrow, this only means that many retail investors was taken for a bad ride again by manipulators (who has zero chance of getting caught, gven our ineffective SEC).

There is no pick of the week this week, partly because the past few days seem to be the season of bazurs. I have disciplined myself not to invest too much in bazurs since mid last year (the initial bet in SGI was done early 2013... there were cut losses and average downs only until August and then I just let this dividend-paying stock stay in my port). So, if the attention of local traders are into bazur, I admit that that those trading days will not be for me.   

However--previous picks of the week are still showing strength. You can still look at how strong the foreign buying in TA, MBT... this could turn up to something big after we go back from the long weekend. It's only me--I just  wont be buying into anything significantly, because of work. (I missed the +50% and sudden -20% the next day of SGI because of meetings and reports). 

Heniweey, enjoy your vacation! Power up!