$PHES and others

 $PSEi - First pull back, after three consecutive days of making green candlesticks.

$PHES - COL now has become a big net buyer buying 24.5 million shares @ 0.53 after being a net seller for five consecutive trading days. Buyers and sellers of this stock are very weak since 23 March, but it has a sudden and unexpected turn today. See what an SRO disclosure can do!

"Despite the negative economic effects of the pandemic, there will be continued demand for housing as the vaccine rollout is made. Hence, Philippine Estates Corporation aims to expand its inventory of projects through the acquisition of land in selected areas where economic growth is expected to show resiliency (i.e. Bulacan and Cavite). In this regard, the board of PHES has approved to undertake a Stock Rights Offering ("SRO") to raise capital for land acquisition." Source: PSE Edge

Only Goldstar is the solid buyer purchasing 3.8 million shares @ 0.54. Both Triton and HDI are net sellers selling 7.3 million shares @ 0.55 and 4.2 million shares @ 0.55 respectively. 

The stock opened @ 0.50 but ended exactly at the low @ 0.4750 after climbing up to 0.60, a typical "pump and dump." 

If you want to enter this stock, you have three options: (1) Wait @ 61.8% Fibo = 0.4650, (2) Wait @ 78.6% Fibo = 0.43, and (3) Wait @ Support 1 = 0.3950. 

$FRUIT - This one really looks good and very promising. The price now is at MA 200 with a volume of 9.06 million higher than the previous trade. All four indicators seem to point at the continuation of a long-term uptrend. 

$RCI - This stock looks very silent. The price is tight and the volume is drying up, 962 thousand lower than the previous trade. 

Looking Good So Far

Looking at PSEi from four different technical indicators, its movement seems to indicate a reversal in trend. That doji two days ago appears to be a reliable signal. This time, I want to take a look at PSEi and two other stocks on my watch list using Accumulation/Distribution Indicator (A/D), Price Exhaustion Indicator (PEI), Relative Strength Indicator (RSI), and Moving Average Convergence Divergence (MACD) Indicator. 

PSEi looks good in all four indicators mentioned above. 

In the case of $FRUIT, the volume is not impressive, but at least it made a higher high today. Its A/D looks good too, as well as its PEI, RSI, and MACD.  

How about $RCI? Its A/D appears static, but the PEI, RSI and MACD are promising. Add to it that the stock today made a higher high @ 1.10 and with a volume 3.15 million higher than the previous trade. 

A Potential Bullish Abandoned Baby in the Making

This Investopedia article describes a bullish abandoned baby with the following characteristics:

1. It is a pattern consists of three price bars that indicate a trend reversal.

2. The first price bar is red showing a huge sell-off.

3. The second price bar is a doji formed from a gap down indicating indecision.

4. The third price bar is green showing that the bulls have regained control.

5. However, some technical analysts allow variations in this pattern such as:

        a. The doji did not gap down

        b. The appearance of more than one doji

If PSEi will have a green price bar tomorrow, that will complete the pattern and that would signal that the current sell-off is about to reverse.  

How about $BSC, $PHA, and $APL? Though their price bar today isn't a doji, could they pass the test of variations?

Reasons Why I am Buying $FRUIT

The technical reasons why I am buying $FRUIT:

1. The price now is at its Support 1 and 200 MA. 

2. There is an A/D divergence. Though the price is still in a downtrend, there is an ongoing accumulation or a buying pressure and I am expecting a potential price reversal to the upside is coming.

The fundamental reasons why I am buying $FRUIT:

The company published a press release last 16 March containing the following positive reports:

1. Despite the challenges caused by the pandemic, the company is determined to keep its aggressive product expansion and community store rollout.

2. "The number of its community stores is expected to reach 50 within a month, on track to hitting 100 before the end of 2021."

3. The company "also recently launched its line of Fruitas Pure 100% Cold Pressed Juices naturally made from fresh fruits and vegetables that contain high amounts of nutrients, vitamins, and minerals." In short, they want to "amplify the health benefits" of their key products.

4. "Within the next few weeks and even with the surge in a number of COVID cases, the company will open Soy & Bean community stores in the cities of Las Piñas and Marikina and its first franchised community store in Rizal." 

5. The company is also "using its community store network to expand its delivery service, making CocoDelivery available through its Soy & Bean community store in McArthur Highway, Angeles City, Pampanga to serve the city and neighboring towns."

From Business World: Fruitas rolls out new product lines and community stores

Applying A/D Indicator to PSEi and Stocks in My Watch List

What is the A/D indicator? What does it tell us?

In this article from Investopedia, here are the key takeaways you can learn from the A/D indicator: 

1. A/D uses volume and price to determine whether a stock is being accumulated or distributed.

2. How will you know that the volume and price indicate either accumulation or distribution?

3. When the price is rising but A/D is falling, it suggests that there is not enough accumulation or there is a selling pressure or distribution going on. This indicates that a possible decline or price reversal is approaching.

4. On the other hand, when the price is falling but A/D is rising, it suggests that there is an ongoing accumulation or a buying pressure and a potential price reversal to the upside is coming.

5. Another way of describing the relationship between volume and price as indicated by A/D is that this indicator shows the influence of supply and demand on price movement.

6. Moreover, A/D is an indicator to identify divergence between the price of the stock and volume. As such, this indicator helps identify the trend, its strength, and potential reversal.

7. Ideally, a rising price should be accompanied by a rising A/D to indicate a confirmed uptrend whereas a falling price accompanied by a falling A/D indicates the continuation of a decline.

8. When the price closes near the high and has a high volume also, A/D will have a big jump.

9. However, if either the price closes near the high but the volume is low or the volume is high but the price closes near the low, A/D will not move as much.

10. A/D as an indicator for a forthcoming reversal requires the use of the chart itself. On its own, it is not that reliable for anomalies in price action happen most of the time such as a gap down with large volume but closing near the high. In such cases, the indicator gives a false signal of an uptrend while in reality, the stock has gapped down.

If we will apply the above insights to PSEi, this tells us that though the price of PSEi dropped 2.94% last Friday, its A/D is still up but showing weakness. Could this indicate a resumption of a decline?

In the case of $PHES, the A/D indicator shows that both the volume and the price are moving in the same direction. We still need to wait for a divergence to indicate a potential reversal. 

How about $LODE? This stock too based on its A/D, both the price and the volume are moving down. 

How about the two gold stocks, $PX and $APX? Both their A/D are flat at the low. Based on the relationship between volume and price movement, these two stocks are more positive. The only difference is that $PX price is consolidating at the middle of its price range while $APX is still in a downtrend. A potential divergence could appear any time soon. 

Among the stocks in my watch list, based on the A/D indicator, $RCI & $FRUIT are the most promising. Though their prices are still in decline, their A/D indicators are consolidating to the upside.  

Lastly, let us take a look @ $BHI. If its A/D indicator is really reliable, it shows a divergence between its rising price and its falling A/D line. This suggests that there is not enough accumulation to support its price increase. There is a selling pressure or distribution going on. A possible decline or price reversal is approaching.

So based on the above analysis of the A/D indicator, as a trader, I would avoid index stocks, for now, wait for $PHES and $LODE to stop falling, wait for $PX and $APX for its A/D line to start moving upward, look for an entry point to both $RCI & $FRUIT, and avoid $BHI. 

$PHES $LODE

 

Entry Price: Choose between 0.42 or 0.3950

As a result of 29 January disclosure, the price of the stock shoot up 49.46%. After a month and 19 days, the price retraced back to 1.02, just a 0.09 higher than that price the day the stock flew. I think the most important part in that disclosure is this statement:

"Lodestar is in pursuit of viable businesses that will give it substantial returns. It is looking to incubate enterprises that will take advantage of current market demands such as, but not limited to, information technology."

Then last Friday, 19 March @ 3.40 pm there was a follow up disclosure to that of 29 January. I think the most important contents are item 1 and the concluding statement:

"After the conduct of due diligence, Lodestar is at the stage of finalizing the terms and conditions of its planned investment in one or several companies that may be engaged in Information Technology, Gaming, Digital Entertainment, and/or Financial Technology."

"Lodestar intends to have a formidable stake in companies that will revolutionize gamified entertainment in the Philippines, integrating digital, mobile and payment gateways."

Will this latest disclosure cause again another run? Well, let's just wait and see. If you want to enter this stock, you can choose between 0.88 or 0.79. But if you can't wait, you can enter the stock at any price at your own risk. 

Watch List

$PX @ 3.78

$PHES - wait for its floor. Same thing with $CLI. 

$DAVIN - Wait for this wild horse to calm down. 

LRW @ 1.31

$RCI @ 1.07

$APX @ 1.23

$DITO @ 8.89

$BHI @ 0.056

$MM @ 4.47

Technical and Fundamental Analysis on Apex Mining Company, Inc.

Nature of Business

Apex Mining Company, Inc. (APX) was incorporated on February 26, 1970 primarily to carry on the business of mining, milling, concentrating, converting, smelting, treating, preparing for market, manufacturing, buying, selling, exchanging and otherwise producing and dealing in gold, silver, copper, lead, zinc brass, iron, steel and all kinds of ores, metals and minerals. The Company's operation is situated in Maco, Compostela Valley.

The Company's mine produces bullions containing gold and silver. All of its production, as well as the incidental production of its wholly-owned subsidiary, Itogon-Suyoc Resources, Inc. (ISRI), were smelted and refined by Heraeus Ltd. in Hong Kong. APX obtained full ownership of ISRI in August 2016. ISRI owns the mill and production facilities of the Sangilo and Suyoc mines in Itogon, Benguet.

In October 2014, APX acquired 100% ownership of Monte Oro Resources & Energy, Inc. (MOREI), and Prime Metroline Holdings, Inc. and other MOREI shareholders used the proceeds of the sale of their shares in MOREI to subscribe to new shares in the Company and in the process acquire control of the Company, diluting to a small minority the ownership of Mindanao Gold Ltd. and Mapula Creek Gold Corporation.

Source: PSE Edge

Fundamental Analysis

Market Price: 1.51

Book Value: 1.10

Earnings per Share Trailing 12 Months (EPS TTM): 0.19

P/E Ratio TTM: 7.95

EPS YTD: 0.18

P/E Ratio YTD: 8.38

Price to Book Value Ratio: 1.37

Return on Equity (ROE): 23.86% (Source: investagrams)

ROE Previous Year:  4.47%

ROE Current Year: 5.09%

Important Notes on Public Disclosure as of 14 December:

We would like to inform the Exchange that as of this writing, sixty-nine (69) employees and contractors of Apex Mining Co., Inc. (“Company”) working in Maco Mine, Davao de Oro have been found COVID positive.

The Mine has been reinforcing all its safety protocols as contained in the Company’s COVID-19 Emergency Response Plan. All offices and work areas of the identified COVID-19 patients were temporarily closed and disinfected. The Company’s Polyplex Dormitory and Senior Staff House were placed on a lockdown and have been designated as a quarantine house to prevent any further spread of the virus. The Company has temporarily suspended communal eating in the site and all food is being delivered to employees’ respective rooms.

With a part of its work force in quarantine it is expected that the Maco Mine underground operations and mill plant will operate at a reduced capacity. The mine will return to normal capacity only after the minesite is declared Covid-free. Alternative work arrangement for the office employees has been implemented to minimize the disruption of support activities.

Technical Analysis

61.8% Fibonacci: Entry Price @ 1.23.

Support 1: 1.48

Support 2: 1.36

Resistance 1: 1.56

Resistance 2: 1.65

Moving Averages

MA 20: 1.56

MA 50: 1.66

MA 100: 1.72

MA 200: 1.52

Volume: 5.68 Million lower than the previous day as of 07 March

A/D: Negative

PEI: Negative

MACD: Negative

Momentum: Negative

RSI: 39.13

Market Sentiment: Silent and taken for granted evident in low volume during its last trading day. 

Gold Price in US Market and EWP

Last 15 February, I published this chart: 

Now, 07 March, after 20 days, it appears that XAUUSD is about to complete its Wave II correction. Possible floor is @ 1,620 area.