The Philippine Stock Market has now closed its 2nd quarter trading with a year to date percentage gain of 14.66%,but nearly flat at 0.57% with a slight deep below -0.13% before the end of the month for June 2017. Yet the highlight remains negative from the past three (3) consectuive weeks of weakness after briefly touching 8046 high for the #PSEI.
With a low at 7734 for the month ending June. This was achieved on the last trading day the 30th of June that culminated the 11 days of decline compared with barely 7 days of up move. Sentiments across the wires in general have been quite negative after PH Holdings declined followed by financials and Industrial holding a wider range of Bearish consolidation. However, PH Holdings managed to side track contrary to the general trend direction of the overall market with financials then leading the rest of the pack.
Click to continue
Check out our refresher information on the .....
Ability to Handle a Correction or a Major Selloff
Understanding Market Misdirection
Check out our refresher information on the .....
Ability to Handle a Correction or a Major Selloff
Understanding Market Misdirection
Some time prior to the decline most PH market analyst, technical traders, and market participants surveyed have called the PSEI beyond the 8000 levels. And briefly did, with the exception the market lost its steam when it drifted lower as major companies declined.
ReplyDeleteThe 7900 - 7800 range levels were commonly called with a few exception before they called it a bear market. Now the tone has changed and most retail investors have thrown in the towel as prices went below 7800. Meanwhile, the unexpected turn came in the last few minutes into the closing when prices changed with a +55 point recovery ending the PSEI at 7843.
As we emphasized....'expect the unexpected turns' and when it occurs in either direction, there will always be uncertainty and denial for those who have lost market confidence on the decline.
ReplyDeleteHowever, take notice that the PSEI is an index that measures the overall sentiment of its major components. But not necessarily specific & well selected stocks that can withstand a market strain while still maintain resiliency at a certain period of time in trading. And this can be achieve by choosing wisely based on price action & market behavior given on a list of respected stocks.
There would be times when 'Technical Analysis' do provide signals on how the market probable direction takes place. Apparently not all technical tools can be applied as they are merely lagging indicators after the fact. Although, combining this with a clear cut and clean 'Price Action Analysis on a chart may well provide a better alternative in reading prices the way it should be.
ReplyDeleteTherefore, a rational approach in paying closer attention to the two comparative charts defined would be far superior and has a more in-depth perspective of the market.
As we always say, these tools provide a guide and not a guarantee for a wining trade. If they are as good as others would claim then everyone would then be a winner unfortunately not!
And on the fundamental perspective and correlation with stock prices now that the end of the 2nd quarter is done; the USDPHP has again showed its trend direction trading well at 50.55 and a session high at 50.72. Investors would now have to make necessary adjustments in protecting stock value of a weaker PHP.
ReplyDeleteIn such market scenario, PSEI would reflect record levels on the first two (2) weeks of the 3rd quarter when its relative price behavior would adjust to the rate differential of a weaker PHP. As companies with international exposure in debt financing would have to draw a fairly good balance between their stock valuation and earnings to compensate for the value lost in the foreign exchange rate.