Reasons behind the Divergent Move
It is important for certain types of investors who trades an 'Exchange Traded Fund' that tracks the main index of the Philippines Stock Exchange Index; where the underlying stocks are listed as to why and how certain corporate policies or stock dividends affects price action & market behavior. This is just one of the times where a 'divergent price action' have taken place.
FMETF Stock Dividend of 3.00% where price adjustments on charts are made ex-date June 5th, 2018. The stock dividend's affects the overall market outlook and directional trend of prices aiming to revisit 111.55 and/or lower back towards the 110.50 levels from which it came from.
The current prices would have to make the necessary adjustments south of its current price at 113.00 and its iNAV at 113.81 levels. And for those who are trading & tracking the PSEI direction, the price equivalent from its declared stock dividend would follow suit.
It is important for certain types of investors who trades an 'Exchange Traded Fund' that tracks the main index of the Philippines Stock Exchange Index; where the underlying stocks are listed as to why and how certain corporate policies or stock dividends affects price action & market behavior. This is just one of the times where a 'divergent price action' have taken place.
FMETF Stock Dividend of 3.00% where price adjustments on charts are made ex-date June 5th, 2018. The stock dividend's affects the overall market outlook and directional trend of prices aiming to revisit 111.55 and/or lower back towards the 110.50 levels from which it came from.
The current prices would have to make the necessary adjustments south of its current price at 113.00 and its iNAV at 113.81 levels. And for those who are trading & tracking the PSEI direction, the price equivalent from its declared stock dividend would follow suit.
A comparative chart analysis of the PSEI as of June 5, 2018 Divergent price move that reflected the market's reaction at the close of the trading session. Where we find a contrary move of the FMETF heading lower at 113.00 vs. the PSEI closing on a higher note at 7685 which should have followed a similar direction, but it didn't!
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The divergence between the #FMETF and PSEI has resulted to the ETF pacing the relative price action of the PSEI as the market reaction of a more influential performance of its regional peers.
ReplyDeleteThe #PSEI Advancing above the 7800 is likewise a welcome treat after a deep price low at 7457 for the past 4 months in a row. While the FMETF reached 115.00 from a low at 113.00 is now trailing the PSEI at its own pace.
Subsequently, following a triple digit rally from the three (3) Major #US #Equity #Indices was the main catalyst for the move higher. Thus providing a greater lift from the momentum and volume build up for the past four days.
Foreign net sellers were met by local institutional players more than willing to cover short sellers eager enough to unwind positions at the lower range of the trend.
ReplyDeleteThus, resulting to a slight volume increase of buyer sentiments with the PSEI moving higher, contrary to foreign outflows registered in the market for the past few days in a row.
Comparing Price Action with Volumes and Foreign Outflows at the PSEI.
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As a result of the stock dividend and price scale adjustment the registered low of he ETF was 111.75 that created the divergence against a higher PSEI closing. Thus reacting to an initial move towards 115.40 resistance level in its first run.
ReplyDeleteWhat some technician may have missed out is that a similar divergent likewise occurred as the PSEI closed above the 7800 that contradicted the price reaction from the FMETF recovery. That is why tow contrary scenarios played out after a relief recovery came a resumption of the decline.
ReplyDeleteWhere prices have declined for the PSEI to a low at 7553 and the FMETF revisiting the 113.00 levels as of June 13, 2018.
The PSEI marks a new low at 7345 that was followed by the FMETF registering a 109.60 low as of the opening am session of June 18, 2018. Price levels at the open have gap down almost all major stocks across the board led by Holdings and the Financial sectors.
ReplyDeleteWith these prices, we can now safely say that MegaTrade101 market & price call between the PSEI led market versus the FMETF has been confirmed. Although, its low at the 109.60 level was forced through the opening levels but the 110.50 - 111.55 range average would be the objective price to look for. Noted on this day: June 18, 2018.
A new low at 7253 resulted from another opening gap lower as fear of trade war escalated between the two major economies and #PH #Peso #depreciation. Widening #deficit have re-emerge from the news as an add on but failed to be a convincing factor.
ReplyDeleteWhile others analysts who claim that the PH #stock #market we're isolated from external influence because of the '#Train & #Build 3x program are no where to be found as new guest resource persons are highlights of the discussion.
+MegaTrade101 As such this could have been avoided by being more open to specific market conditions presented along the way since March.
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