Sequence Trade: PSEI Readings Mix with Distinct Trade Setup Part 2
With the PSEI topping at the 7880 level on the 2nd week of August; identifying that the 'divergent trend' between the three major companies AC, SM & GTCAP, Particularly focused on GTCAP stock prices was identified to have the distinct divergence that defines a higher probability of a decline since our first market call dated Aug 9, 2018.
Currently priced & trading at 856.00 with a low at 846.50 is merely shy away from its previous low at 840.10 marked last June 25, 2018; almost a full turn around. This has been reflected by the compartmentalized process comparing it with the similarities of the trade setup. This is based on the price action and market behavior that the share prices showed between June 5th to the 26th, of 2018.
Likewise, by keeping track of the market calls, bear in mind that it provides a continuing narratives of what has already been defined and capitalize on it especially when the call is on the right side of the trend well within a three (3) weeks market interval.
GTCAP marked its high at 1010.00 first overlay week of August, 2018 and continued its slide to its 2nd low at 869.00 as a clear bear signal. And have dropped to its current low at 846.50 nearing last June 25th low marked at 840.00.
The wide spread between PSEI current price level above the 7800 with GTCAP current low levels at 853.00 +/- clearly states the divergence of its stock prices compared with the price recovery of the PSEI at this time. At present, there is still no technical indication or signal that a price recovery / reversal is in the making. Although, daily sessions may tend to prove otherwise for some breathing room before the next move would be reflected.
Nearing the end of the month for position adjustments not necessarily window dressing is to be expected with the PH Stock market culture of cashing in whatever gains have been made or would have lost from almost a 100% round turn where prices came frorm. And by simply re-positioning with stocks that may prove to be well worth the investment would be initiated by then.
ReplyDeleteThe spread between the index and the stock price would remain, until such time the market makes its own adjustments. Other sector indices like industrial & property would remain firm with a few 2nd liners would still be lagging behind.
ReplyDeleteMeanwhile, US denominated bond offerings are taking shape from prominent banks to tap capital markets to increase bank requirements as tightening monetary policies are underway. Likewise, this is a way for these financial institutions to hedge against the depreciating value of the PHP, but increasing their international exposure to changes in the foreign exchange market.
To be specific, GTCAP made a new low at 846.50 while the PSEI closed at 7855 near the 7880 high for the month of August. Meanwhile the continuation of the price recovery for the PSEI met daily session lows at 7769 for the week coming from a support range at 7478 - 7500 respectively.
ReplyDeleteAug 31, 2018 - From our humble beginning & online presence in 2010, #MegaTrade101 we may not have the huge following numbers to be proud of, but we remain true to our course of sharing from time to time bringing #significant, #valuable #information on how we view the #financial #markets #independently. Thank you and much appreciation!
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The markets ability to sustain above 7880 for the PSEI have failed dragged by a higher inflation report of 6.4, & foreign investors outflow have kept market selling pressure high. Likewise the continuing PHP depreciation is not helping local retail investors at all.
ReplyDeleteNarratives on the continued decline of GTCAP stocks have already reached beyond its retracement price from which it came from at 869.50, 846.50 and finally at 814.00 respectively. Where the declining lows would have already triggered market capitulation among previous long positions that held on while the stock's relative strength remained oversold.
ReplyDeleteThe PSEI previous market recovery can now be called a 'dead cat bounce' as we have made mention that diagonal uphill climb towards the 7880/81 levels would not be a full recovery. The remerging US - China trade war spat, foreign investment outflows other than inflation pressures have come at terms with regional peers to do the same market reaction. Thus seeing quite a number of investors exit on risk aversion.
For now, institutional sentiments on SMPH and GTCAP far outweigh the recent price recovery made by these stocks compared with the PSEI. Validating that the Divergent trend do exist which is reflected on price action.
ReplyDeleteThe relative adjustments along with the recent high on the PSEI at 7433 which drove the market some excitement only to be pared back to where it came from at 7205 low on today's session close. Whereas GTCAP low at 805.00 aims to go further beyond the 800.00 level which would not be discounted. The relative price action to anticipate likewise with SMPH.
Finally SMPH gives in to the pressure as it moves towards 33.50 low during the day session as of Oct 2, 2018.
DeleteCopy & Paste on browser Chart link:
https://www.tradingview.com/x/w2tZ1wXR
Based on reports, GTCAP attributed it stock price decline from slower sales part of which has a bigger portion of their revenue growth coming from its automotive distribution; which was previously reported.
ReplyDeleteAlthough, that have been priced in when higher taxes were imposed, it is only now that the repercussion have aggravated its stock prices. Then again, with a recent new low at 795.00 have been overdone, a relief price recovery is expected by the end of the week's trading as well as for the 3rd quarter period.