Reflection: PSEI Price Action other than Trade War Jitters

Strategy & 'Appropriate Technical Trading Approach' 

A notable observation on the 'Market & Price Behavior' of the PSEI benchmark and its underlying stock components is where the 'Rule of Transparency' on the 'Timely Delivery' of sensitive information &  policy decisions between the PSE announcement and the SEC's actual approval on 'Short-Selling' on June 5th is crucial for all market participants. 

Such final approval came to light to the investing public released on June 22nd by the PSE could have been done earlier than the said date. For those well within the know, this information have already been known well within its circle that such approval has been made by the SEC. A timely inclusion well placed, since the PSEI's performance has been encircled with external factors that are extremely negative, pushing investors sentiments including the benchmark price index and underlying stock components more into record lows. 

Short Selling among institutional players are an open secret but not commonly and openly discussed in the PH stock market trading. Especially that the application for approval from the SEC was still pending then. And its approval has been a welcome treat among investors and retail traders during the formal announcement last 22nd of June, 2018. 

In comparison with the time line of June 5th to June 22 (11 days of actual trading) as described on the overlay chart; the degree of market volatility increased while the velocity / momentum of the decline other than what the market already know and digested, likewise have gained traction and established record lows even after the said date have been noted. Click to continue 

Trade Update: PSEI Recovers from Lows 
Sequence Analysis Validated as of Aug 3, 2018

How Tactical US-Asian, PH Investors & Traders Prepare for Short-Selling Program

Combined with practical strategies in place!

PH investors and traders would eventually welcome the proposed 'Short-selling Program' by the PSE which is around the corner. For now, most of them would have to contend and wait it out for the time these programs be implemented.

Indeed, long over due especially for investors right to level off the playing field while properly weighing risk / reward on stocks and other financial instruments. At least even if it took more than a decade, it would take the PSE a step closer and be part of a global standard in trading financial instruments.

On the other hand, preparing for such program would at least entail investors and traders another perspective on how it could best be executed when the time comes. A considerable market re-orientation on how to best execute short-selling either as a 'Hedge' or a speculative strategy combined with 'Dollar or Php Cost Averaging' as a dynamic trading methodology must take some serious due diligence. Knowing this in principle is totally different compared with properly having the actual knowledge of how it is best executed to avoid being flat-out of the market where such practical funds would be tied down while it can best be used for other equally potential instruments or stock choices. 

As the embedded 'CULTURE' of trading PH stocks on the long side of the market vs. the short side would have to be learned properly and make adjustments especially before every market intervention takes place. Otherwise, short-sellers would likewise be as susceptible to certain price action activities that would see an adverse direction, no different from being on the buying side of the market. This is practically true with the existing trading practices in the PH stock market as of now is to have clear concept of how the PSE Index moves as the benchmark for PH stocks. A deeper understanding of the intricacies of Price Action, trading / investing and market behavior are crucial subjects to learn and be aware off.

For our Philippine members and viewers, if you have interest to join our next round of discussions and meeting schedules regarding these matters which may include other financial instruments. Do send an email and intent to be included in our scheduled meeting /or event.

PSEI Performance, Sequence  Analysis & Projection
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For private group discussion can likewise be made by appointment at megatrade101@gmail.com

 

Have a GREAT Season's Holiday! And Only the BEST TRADES & INVESTMENT DECISIONS for the coming New Year 2018!

ENJOY & CHEERS!