Foreign investors outflow have kept market selling pressure high. Likewise the continuing PHP depreciation is not helping local retail investors at all. As value investing have lost ground on both fronts with a triple digit decline on the PH stock market with the PSE Index closing at 7638 as of Sept 6, from a session low at 7567. Led by Mining/Oil down by -2.86%, followed by Holdings by -1.93% , Financials with -1.74% and Property sector down by 1.21% respectively.
As mentioned, it would take a considerable move from a decline which is the normal case scenario for the market to correct its misalignment when we had identified the divergent trend earlier period of August. With the continuing PHP depreciation and lost value in stocks would be quite a drag on a market that already has negative sentiments afloat on top of the political issues surrounding the present administration recent moves.
Technical vs. External Fundamentals
Meanwhile, after identifying the previous 'Mix Reading, Divergent Trend & Market Behavior' signal that we made reference to from our previous market call, the technical perspective already have been identified. Where price chart & price formation reflected above would have to complete its 'Complex Inverted H/S Formation' before any real serious price action would breakout from its intended forward looking pattern.
Only a contrary external fundamental could offset such anticipated pattern with a continuing price decline. There are at least a few issues that may emerge such as coming from a considerable and/ or continuous Foreign outflows, PH political misdirection on current issues, external forces of a major correction and /or a divergence with global equities such as the US markets just to name a few examples.
These are the type of market conditions that would be discussed during the brunch meetings as an example. And how retail self directed investors and traders would be able to navigate through the unwarranted declines where short selling is still short of being applied.
ReplyDeleteMaintaining value on investment is a first priority especially when the recent PSEI price recovery before this drop was not enough to cover the nearly 8 months of decline from the PSEI peak since January 31.
What needs to be done is to make the necessary trade plans to preserve value and find solutions looking forward to offset lost and regain profitable ground by net positioning equivalent to or exceed the total value exposed in the market. That's why guidance from these types of market conditions have to be made though proper price action analysis.
ReplyDeleteFriday's closing as of Sept 7, 2018 have continued the selling pressure with the PHP value losing more ground as it accelerates to the 53.80 high on top of the regional performance among its peers in Asia.
ReplyDeletePSEI have marked a low at 7526 only to close with a slight pullback from a capitulation short-squeeze as participants wouldn't want to hold their positions over the weekend. This is why we emphasize in so many of our articles and information shared that when so called market intervention before market opening and closing leaves retail investors and traders at the hands of institutional players.