Bearish View of PSEi?

 

A bullish technical analyst I stumbled in one FB trading group in 2015 turned recently into a bear. Perhaps, his experience of COVID-19 and the lockdown caused him to change his mind. As I evaluate his chart, I also looked back to the chart I made in December 2016. I overlooked the number of waves in ABC pattern resulting to a wrong counting. My only hesitation in joining him in his bearish outlook is the massive liquidity injected by governments worldwide into the financial market. 

2020 Year to Date Gain

 I started trading in the Philippine stock market in 2015. After a year, I lost 49% of my capital. Beginning 2016, the bleeding stopped but I could not monitor my progress for I failed to keep a record of my monthly activity. In 2019, I started to record my trades. After a year, I gain 31.93%. 2020, the year of the pandemic, the lockdown and the power freaks and despite the financial struggle of most Filipinos, the Lord has been so generous to me by giving me a 61.89% year to date gain. I assume that many traders out there especially those who stick with $DITO, have gained bigger % than this.  

Watch List: Buy and Sell Signals

                            Weekly                        Daily                    60 Minute

$APX                   Sell                         Neutral                     Neutral                          

$CHP                   Neutral                   Neutral                      Neutral

$DITO                  Buy                        Neutral                      Sell

$FNI                     Neutral                   Sell                           Neutral

$FRUIT                Buy                        Neutral                      Buy

$MM                    Buy                        Neutral                      Neutral

$MRC                  Buy                        Neutral                       Buy

$NIKL                  Neutral                  Neutral                       Buy

$NOW                   Sell                       Sell                            Buy

$PX                        Sell                       Neutral                      Sell

 

XAUUSD

Trend Line Support: 1848 

Entry Price: 1848

Cut Loss: 1847

EURUSD

Support 1 : 1.1664

Trend line Support: 1.1610

Entry Price: 1.1610

Cut Loss:1.1609

Take Profit: 

$APX in Four Time Frames

 

60 Minute - It appears topping.

Daily - Given there is a big gap down the current price, we still don't know its direction.

Weekly - Its a morning star!

Monthly - It appears that the long-term trend is reversing. 

CONVERGE's IPO Debut

What an introduction! The stock opened @ 16.78 and closed @ 15.22 losing 9.40%. Price range is between 14.92 to 16.80. Total value is 3.6B, which I speculate that 1B of it was used to stabilize the price @ 16.78. UBS AG Singapore Branch is tasked to support the price of the stock within 30 days beginning today, but its buying capability is limited only up to 15% of total shares. The task of supporting price is done  in both ways, buying and selling shares, which UBS did today. It bought closed to 87 million shares and sold 22 million shares. If the total shares is approximately around 1.7 B, 15% of it will be 255 M. And then deduct the total number of sold shared from the total number of bought shares, you will come up with 65 million shares used to support the price. So out 255 million, UBS still has 190 million shares to buy just to stabilize the price. The Prospectus also mentioned the stabilizing agent has been given the discretion to support or to discontinue supporting the price. Just thinking, even with a stabilizing agent with such huge buying power, the stock still declines significantly, what do you think will happen if the stabilizing agent after 30 days discontinue its support? 

1.

1

Seeing $MM in Four Time Frames

60 Minute - A doji

1 Day - It appears that its next target is to break 3.52

Weekly - Wave 3 of Wave 3, the strongest Wave!

Monthly - Forming Wave 3
 

Seeing $FRUIT in Four Time Frames

60 Minute - It appears that the trend is so strong.

1 Day -  It appears that its goal is to break 1.32.

Weekly - Just waking up from slumber.

Monthly - It seems that a trend reversal is at work. 
 

Seeing $DITO's Price in Four Time Frames

60 Minute - Still in an uptrend

1 Day - Also in an uptrend and it seems that 8.05 is its goal.

Weekly - Forming Wave 5 of Wave 3

Monthly - Still in Wave 3

 

The Virtual and the Actual: $DITO $FRUIT $MM

 

$MRC's 61.8% Fibonacci

 After a 17.90% run for the past two days, the stock now retraced 5.19%. Is this just a temporary rest? Or is 0.41 its top for now and the stock will continue its pull back by tomorrow? 

For those who are thinking of entering this stock, you can use either 50% or 61.8% Fibonacci retracement as your entry points: 0.32 or 0.30. 

 

$MM Looks Like VCP to Me

 I entered @ 3.01 for the stock looks like VCP to me. After few minutes, when I returned to my table, the stock made a new high @ 3.30. It is still too early. It is just 10:40 in the morning. This stock has been in consolidation for 44 days. So that's a good sign. There is no excessive emotion involved yet. And both the volume and the value too are good. Volume is 31.44 million higher than yesterday's trade. Value now is 183 million. Wait for late comers to ride this run. When you see them coming, that's the time to move out. 

Charts are interesting. Both the weekly and the hourly charts show that this stock stopped its pullback respecting the 78.6% fibonacci retracement:

But as for its daily chart, it is not so promising for it still struggles to enter its uptrend channel:

Watch List as of 09 October 2020

$ABA $APL - Speculative

$FRUIT - IPO play

$CHP $GREEN - recommended but . . .

$IRC - infra play

$LPZ - old conglomerate 

$MFIN - financial play

$APVI $IDC $WEB - almost similar to the first category, very unpredictable

$TBGI $MRC - penny play

$APX $PX $NIKL $PXP - mining play

$MEG $MPI - Index stocks but laggard

$BLOOM $DMC $FGEN $LTG $TECH - among the established names

$DITO $MM $NOW $C - trending stocks

$PPC $PHA - old time favorite

$FRUIT @ 1.20

$FRUIT ended the week with a volume 6.68 million higher than yesterday's trade. RSI is bullish @ 50.19. Though the stock made a new low, but it also created a higher high and the good thing is that it closed near the high. MFI too for the last three days was below 20, which is considered oversold. Today, it shifted to 31.46. Though the stock is still in a downtrend, but its A/D line is rising. This could be an early sign of reversal. 

Will $DITO hit 4.63?

"In virtual trading, no emotion is involved though your 13M gain in the morning turned into a 14M loss by 11:30AM. In real trade, the 135% run appears not normal and a strong pull back is possible anytime, which just happened. If you're getting restless, locking in your gain will calm you down. But don't fret when you see this stock soaring to 300 and even 500%. That's a reality every trader must embrace." 

The above quote is my summary reflection after today's trade. After more or less 6 years of trading in the Philippine stock market, I thought I already have a strong stomach. Today, I realized that I am more resilient in accepting losses than in handling gain. After suffering a 33% setback last months of February and March, I lost my stamina to trade. I decided early September to just focus in one stock and sit back until next year. But I was wrong. Seeing my stock running 135.13% in a month, I feel restless. I see such run as not normal. I am even thinking that perhaps since this stock is somehow related to Chinese government and I see a lot of foreign money entering it, big Chinese money is at work. I cannot get out of my mind that a possible strong pull back is at hand. Emotionally and mentally, this is no longer healthy. So to maintain my composure, I decided to get out around 10:30 AM. To my surprise, my fear came true. The stock pulled back down to 5.20 one hour after I left. 

The hardest part in this game is to accept the fact that nothing is certain. In early September, I was speculating that this stock at minimum will reach 20.00 per share. I thought I was emotionally prepared. What I was imagining in my mind was a smooth run of simultaneous rally and slump. But seeing the stock running for six consecutive days with a brief pause last 30 September, I got suspicious. To me, this is not normal. And every time a stock is flocked by an emotional crowd, something bad is destined to happen. 

Now, I am standing in the sideline as an outside observer. The strength of the horse thrown me out. But to me, a strong selling @ 11:30 is a signal of distribution. I would rather sit and wait. Let us see if this stock will hit 61.8% fibo @ 4.60. If not, I will just wait for my emotion to cool down . . . 

       

$ELI

7.14% up in a down day! The last time this stock surged with a volume 2.9 x bigger than today's was 24 October last year. It was followed by a 5 month decline and a 2 month sideways movement. Uob Kay Hian remains a big seller for 6 consecutive days now. A stock left for dead somehow came to life today through the support buying of both COL with 9.5Msh & BPI with 5.7Msh. Is this the start of a new trend? Or will this end in another failed rally?

Cautiousness and Cockiness in Trading

Trading isn't easy. It's not for the weak in heart. 

In my virtual account, I will start clean this 2nd week of June. 

I am reminding myself to be cautious when I feel cocky. It is during this time that I lose big. I also need to remind myself not to be afraid to take risk. Due to my losses, I have the tendency to be extra-cautious to the point that I might fail to execute my trades. I think a small dosage of fear is healthy, but not the point that it will paralyze me.