MegaTrade101 take on the recent PH Stock market price action
Setting aside the Turkish crisis for now, the PH stock market price action on the decline was attributed by some market analysts from the recent surprise report from a 6% reading on the Philippine economy slower growth, plus the recent BSP interest rate hike of 50 basis point on top of the previous 5.7% inflation rate data that added to the selling pressure. Although, these fundamentally driven factors have pushed stock prices lower, the major heavy weights in the PSEI Composite index were affected more, and now it is slightly above the 7500 support level.
With the continuing decline in stocks; PHP local investors have turned risk averse due to the persistent market volatility and bearish sentiment surrounding current conditions. The technical perspective on the divergence described on the chart below dated Aug 9, 2018 have now been validated. Especially with prices heading south, GTCAP is back below the 920.00, AC at 941.00, SM at 929.00; while the PSEI is at 7536 as of writing. Take note that a rebalance on the PSEI & MSCI Global index is on schedule and weightings would vary especially with China's entry into the mix.
A side comment on market play: considering certain market conditions surrounding contagion effects, the price recovery on the PSEI were in line with price levels from June 5th, 2018, have distinct similarities that drove prices lower. With the exception that there were different market conditions then price action and trade setups with similar chart formation.
These type of market situation can also draw effective strategies to be expected as certain circumstances could be taken advantage of with defined risk levels. The probability of a market decline was high due to the presence of a technically driven divergence. Two typical examples are GTCAP and SMPH.
Market Update Sequence Analysis:
Aug 29, 2018 - Comparative Analysis: PSEI & GTCAP Divergent Trend Action
And at times can be called a mere coincidence and / or a hindsight reflection that can be anticipated. It only depends on one's perspective if and when one would take action when such trade setup presents itself.
Local retail investors are still kept well within their own trade parameters, would have to wait it out for SHORT-SELLING to be implemented. With the exception for those who have been in such practice ever since June 5th formal SEC approval for the program.
ReplyDeleteOur hats up for FDI who finally have so called mastered the way trading the PH stock markets have already paid their own tuition fees, but have now been vibrant in knowing how to play the markets in relatively short span time-frames before a huge decline occurs. As trading volumes have deteriorated even from the recent re-entry from the lows at 6923/29 respectively.
GTCAP prices have drifted lower at 894.00 from its high at 1010.00 where the divergence was more defined. The same goes well with SMPH after marking a high at 39.50 and have moved lower to its current levels at 35.70. Thus validating our market call as of Aug 3-9, 2018
ReplyDeleteWith the gains made from these two stocks, and how to protect these gains are important. The most logical and sensible way is to settle with the profits made. For tactical investors who would prefer to maximize market potential can simply lock in the total amount gained by using Arbitrage leverage.
ReplyDeleteTo know more of this strategy, send us an email / inquiry and we'll be happy to oblige. Send to megatrade101@gmail.com directly. And we'll answer accordingly. Thanks
The end of the week's trading has left the PSEI still down in spite of a good recovery in US stocks. Volumes on the local bourse were fairly muted not enough to perk prices even when Friday's PSEI looked at 7583 with a 66 pt daily price recovery.
ReplyDeleteAn obvious misdirection where major companies such as BDO, BPI, GTCAP nearing its 869.50 low for the year and SMPH have been leading the decline. The only remarkable exception is SMC posting a 148.30 high after a low at 139.90 for the week and 135.00 at the start of August.
With the PSEI topping at the 7880 level on the 2nd week of August; identifying that the divergent trend between the three major companies, GTCAP stock was identified to have the distinct divergence that defines a higher probability of a decline since our first market call dated Aug 9, 2018.
ReplyDeleteCurrently 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 with the right side of the trend.
As a result the continued bearish sentiments from a market play recovery have again caught some retail investors and traders flat-footed as the PSEI is back on track lower from where it came from. PSEI is currently at 7205 as of this writing. Unfortunately, with these price and percentage adjustments now relatively higher have more room to its original bear trend leaving individual stocks further to loose value moving forward.
ReplyDeleteFor 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.
The 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.