After reading Minervini's text, I came up with 7 questions that will serve as criteria in hunting stocks:
Monday, September 17, 2018
Sunday, September 16, 2018
$PHA - Another Interesting Stock
Driven by a positive press release, the stock shot up to 0.52 from 0.37 last 30 August. Those who ride this stock based on emotional decision were certainly disappointed. The following 5 days, the gap was filled and the stock returned to where it started @ 0.37 and then rallied to 0.43. This time, the trade is less emotional.
Trading based on emotion isn't healthy. The fear of being left out causes traders to commit mistake. It is because the mind is covered with a negative emotion causing him to cloud his decision.
Trade value the day the stock soared was 356x higher compared to the previous trade. This is an indication that something is happening in this stock. However, the following 5 days show a continuous reduction in volume and decline in price. This to me indicates a healthy retracement. On 31 August, the volume was 3.2x lower; 03 September, it was 1.6x lower; 04 September, it was 2.4x lower; and on 05 September, it was 3.7x lower. And then on 06 September, the bulls returned and pushed the volume to increase 7x higher.
After that 2nd rally on 06 September, it was followed again by a 5-day retracement returning the price to 0.3850. On 07 September, volume was 1.4x lower; 10 September, almost the same as the previous trade; 11 September, 4.8x lower; 12 September, a sign of hope for the volume increased 2.4x higher; 13 September, volume was 1.5x higher but the price was down, not a good sign But last Friday, volume was up again 1.4x higher on a positive day.
Where do you think this stock is heading? As before, it might have its 3rd rally followed by a 5-day retracement. Better to wait and observe. A possible entry price is @ 0.40.
Trading based on emotion isn't healthy. The fear of being left out causes traders to commit mistake. It is because the mind is covered with a negative emotion causing him to cloud his decision.
Trade value the day the stock soared was 356x higher compared to the previous trade. This is an indication that something is happening in this stock. However, the following 5 days show a continuous reduction in volume and decline in price. This to me indicates a healthy retracement. On 31 August, the volume was 3.2x lower; 03 September, it was 1.6x lower; 04 September, it was 2.4x lower; and on 05 September, it was 3.7x lower. And then on 06 September, the bulls returned and pushed the volume to increase 7x higher.
After that 2nd rally on 06 September, it was followed again by a 5-day retracement returning the price to 0.3850. On 07 September, volume was 1.4x lower; 10 September, almost the same as the previous trade; 11 September, 4.8x lower; 12 September, a sign of hope for the volume increased 2.4x higher; 13 September, volume was 1.5x higher but the price was down, not a good sign But last Friday, volume was up again 1.4x higher on a positive day.
Where do you think this stock is heading? As before, it might have its 3rd rally followed by a 5-day retracement. Better to wait and observe. A possible entry price is @ 0.40.
$TBGI - A Flashback!
The stock was considered dead last 05 December 2017. There was no price range; it was flat @ 0.1850 and the volume was just 10k.
Prior to 14 December 2017, except for that rare volume of 1.3Msh on 19 September, the range was between as low as 10ksh and as high as 390ksh. Since 14 December as a result of 3rd telco play, this stock soared from tens to hundreds of thousands of shares in volume in a day to million of shares.
Since then, it's difficult to track the buy signal of this stock if one has to depend on price tightness and volume dry up. The lowest volume of 2.1M shares happened twice, 26 May & 28 June this year.
Just recently, the stock traded with above average volume for 4 down days, September 5, 6, 10, & 11. Ordinarily, this is taken as a warning. However, from 12 to 14 September, the stock seems to refuse to revisit 0.51, its 100 day MA. And in fact, it even closed with a doji last Friday.
How are we going to interpret this price action? Is it a reliable bullish set up?
Last 31 August, the stock appeared to form a VCP pattern. It seems that all the ingredients were there. There was price tightness, there were two shakeout, and there were also two contractions from greater to lesser volume. However, the pattern was a trap. Instead of resuming its uptrend, the stock dropped from 0.67 down to 0.55 in just 5 days with above average volume.
I think using price tightness and volume dry up as parameters to buy this stock are inapplicable. If we will take the doji last Friday as bullish, remember that the price range is still relatively wide, 0.56 to 0.59; and volume is still high at 11.9Msh. During previous rallies, prices are not so tight and volumes did not dry up. Observe the following notes:
Price Range Volume
01 August - 0.52 to 0.56. 61.9Msh
11 July - 0.4450 to 0.4550 4.6Msh
24 May - 0.42 to 0.44. 14Msh
30 April - 0.4150 to 0.44 11.5Msh
13 March - 0.50 to 0.52. 13.6 Msh
I think a more reliable buy signal has to consider the following:
1. Wait for weekly chart to paint a morning star.
2. Wait for the stock to return above both its 20 and 50 day MA, 0.64 & 0.60.
3. Though seem inapplicable, observe price range to close a little bit and the volume to lower at least between 5 to 10Msh.
Prior to 14 December 2017, except for that rare volume of 1.3Msh on 19 September, the range was between as low as 10ksh and as high as 390ksh. Since 14 December as a result of 3rd telco play, this stock soared from tens to hundreds of thousands of shares in volume in a day to million of shares.
Since then, it's difficult to track the buy signal of this stock if one has to depend on price tightness and volume dry up. The lowest volume of 2.1M shares happened twice, 26 May & 28 June this year.
Just recently, the stock traded with above average volume for 4 down days, September 5, 6, 10, & 11. Ordinarily, this is taken as a warning. However, from 12 to 14 September, the stock seems to refuse to revisit 0.51, its 100 day MA. And in fact, it even closed with a doji last Friday.
How are we going to interpret this price action? Is it a reliable bullish set up?
Last 31 August, the stock appeared to form a VCP pattern. It seems that all the ingredients were there. There was price tightness, there were two shakeout, and there were also two contractions from greater to lesser volume. However, the pattern was a trap. Instead of resuming its uptrend, the stock dropped from 0.67 down to 0.55 in just 5 days with above average volume.
I think using price tightness and volume dry up as parameters to buy this stock are inapplicable. If we will take the doji last Friday as bullish, remember that the price range is still relatively wide, 0.56 to 0.59; and volume is still high at 11.9Msh. During previous rallies, prices are not so tight and volumes did not dry up. Observe the following notes:
Price Range Volume
01 August - 0.52 to 0.56. 61.9Msh
11 July - 0.4450 to 0.4550 4.6Msh
24 May - 0.42 to 0.44. 14Msh
30 April - 0.4150 to 0.44 11.5Msh
13 March - 0.50 to 0.52. 13.6 Msh
I think a more reliable buy signal has to consider the following:
1. Wait for weekly chart to paint a morning star.
2. Wait for the stock to return above both its 20 and 50 day MA, 0.64 & 0.60.
3. Though seem inapplicable, observe price range to close a little bit and the volume to lower at least between 5 to 10Msh.
Saturday, September 15, 2018
$FGEN's Price Action Catching Up With Its Fundamentals
The technical aspect of $FGEN has finally caught with its fundamentals after 10 months. The stock bottomed last 22 June @ 14.10. After more or less 3 months, technically speaking, the stock now is in an uptrend.
The stock's price as of last Friday, 14 September was 16.66. Its BVPS is 25.67. It is definitely undervalued with a 0.64 P/BV (x). With a 1.49 2017 EPS, its 2017 P/E (x) was 11. As to its P/E (x) estimates between 2018 to 2020, COL Financials came up with 6.40 for 2018E, 6 for 2019E, and 5.90 for 2020E basing on 2.57, 2.75, and 2.82 EPS consecutively.
COL Financials upgraded the fair value of this stock for the last three months. On 03 July, its FV was upgraded to 26.50 and just recently last 11 September to 28.80.
The stock's price as of last Friday, 14 September was 16.66. Its BVPS is 25.67. It is definitely undervalued with a 0.64 P/BV (x). With a 1.49 2017 EPS, its 2017 P/E (x) was 11. As to its P/E (x) estimates between 2018 to 2020, COL Financials came up with 6.40 for 2018E, 6 for 2019E, and 5.90 for 2020E basing on 2.57, 2.75, and 2.82 EPS consecutively.
COL Financials upgraded the fair value of this stock for the last three months. On 03 July, its FV was upgraded to 26.50 and just recently last 11 September to 28.80.
Friday, September 14, 2018
Financial Turnaround and Price Action: $FGEN's Story
16 August 2017, there was a reversal in 1H17 but the price continued its decline until 31 August and bottomed @ 16.83. From that based, the stock rallied up to 19.00 until 15 September followed by a retracement down to 18.07 on 27 September.
A trader who bets on financial reversal for his trade and would decide to sit long on this stock had definitely suffered great disappointment when he saw it crashed from 19.72 to 16.87 on 20 October 2017. The stock rallied short up to 18.72 on 08 November 2017 only to resume its downtrend until 06 March 2028 and bottomed @ 14.32. And then from 07 to 12 March, the stock had a 4-day party peaking @ 18.30 and reversed trend again until 22 June this year bottoming @ 14.10.
Two lessons here:
One, the stock as far as its financial statements are concerned have turned profitable since August last year, but the market ignored its fundamentals until 22 June this year. Meaning to say, the four press releases dated 16 August and 15 November last year and 03 April and 10 May this year were either consciously or unconciously ignored by the market.
Two, this tells us that to be right about the stock's fundamentals does not necessarily result to a profitable trade. It would take 10 long months before the market has finally taken a cautious look and consideration of this stock.
A trader who bets on financial reversal for his trade and would decide to sit long on this stock had definitely suffered great disappointment when he saw it crashed from 19.72 to 16.87 on 20 October 2017. The stock rallied short up to 18.72 on 08 November 2017 only to resume its downtrend until 06 March 2028 and bottomed @ 14.32. And then from 07 to 12 March, the stock had a 4-day party peaking @ 18.30 and reversed trend again until 22 June this year bottoming @ 14.10.
Two lessons here:
One, the stock as far as its financial statements are concerned have turned profitable since August last year, but the market ignored its fundamentals until 22 June this year. Meaning to say, the four press releases dated 16 August and 15 November last year and 03 April and 10 May this year were either consciously or unconciously ignored by the market.
Two, this tells us that to be right about the stock's fundamentals does not necessarily result to a profitable trade. It would take 10 long months before the market has finally taken a cautious look and consideration of this stock.
$PHES Update
A trader in haste will certainly run into trouble. This is because entering a trade with either a premature plan or simply basing on a certain kind of spur of the moment, a trader is bound to commit mistake.
Still not done in reading Minervini's text, I was in a hurry to immediately test in actual trade the insights I gleaned. Somehow, I saw $PHES both with its turnaround story and technical indicator passing my criteria. I bought @ 0.55 and immediately it went up. I told myself, "This is it!" I was so glad that price action immediately confirmed my trade only to see around 2PM the stock crashing. As it hits my cut loss @ 0.51, I immediately closed the trade without rationalization. I think if there is one thing worth rejoicing in reading Minervini, this is it. It finally dawned on me that the discipline of cutting loss is a must not only in surviving, but also in thriving in this field.
And so I realized that familiarity with a stock is also important. I started observing $PHES and analyzing its price history. I saw recurring pattern.
As for my observation, last 06 September, the price was unchanged and tight, and volume is drying up. So I thought that the run is near only to see the following day its volume doubled in a down day. That to me is considered alarming. My suspicion was confirmed for in 13 September the institutions have returned not to buy but to sell. Trade value that day was 5.3x bigger. Will the stock visit its 200 MA @ 0.40?
As I analyzed the price history of this stock, I observe that for three times, the stock only rallies when its price is tight and its volume is less than 1M shares.
Still hesitant to enter @ 0.44. I might be placing my capital for a longer holding period. I decided to simply wait for institutional buyers to return.
Still not done in reading Minervini's text, I was in a hurry to immediately test in actual trade the insights I gleaned. Somehow, I saw $PHES both with its turnaround story and technical indicator passing my criteria. I bought @ 0.55 and immediately it went up. I told myself, "This is it!" I was so glad that price action immediately confirmed my trade only to see around 2PM the stock crashing. As it hits my cut loss @ 0.51, I immediately closed the trade without rationalization. I think if there is one thing worth rejoicing in reading Minervini, this is it. It finally dawned on me that the discipline of cutting loss is a must not only in surviving, but also in thriving in this field.
And so I realized that familiarity with a stock is also important. I started observing $PHES and analyzing its price history. I saw recurring pattern.
As for my observation, last 06 September, the price was unchanged and tight, and volume is drying up. So I thought that the run is near only to see the following day its volume doubled in a down day. That to me is considered alarming. My suspicion was confirmed for in 13 September the institutions have returned not to buy but to sell. Trade value that day was 5.3x bigger. Will the stock visit its 200 MA @ 0.40?
As I analyzed the price history of this stock, I observe that for three times, the stock only rallies when its price is tight and its volume is less than 1M shares.
Still hesitant to enter @ 0.44. I might be placing my capital for a longer holding period. I decided to simply wait for institutional buyers to return.
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