Comparative Analysis Validated: PSEI & GTCAP Divergent Trend Action

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. 

Details on Chart Overlay Analysis on website 

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. 

iShares MSCI EPHE Philippine ETF Edges Ahead

In the absence of the PH stock market as of Aug 27, 2018 due to the National Heroes day celebration, the US Philippine ETF - EPHE equivalent to the PSEI has edged higher; way ahead of the closing price at 7766.47 as of Aug 24th.

This has given US PH investors a leg up which the local PH stock market would try to play catch up. But we all know how institutional players, along with their respective local & international brokers would try to stay ahead of the game with accessibility to position in the US ETF.
These are the times where retail investors can level a playing field by being able to have the same access level that can Arbitrage Trade in the US market. Thus equally having a strategy to hedge the depreciating value of the PHP against the USD. Or whenever the preference to go long to cost average on a high PH index fund or ETF trade position can also be a strategy. There are other strategies that can be made, for as long as one knows the mechanics.

iShares MSCI Philippines
EPHE · August 27, 11:57 AM EDT
33.31
▲ 0.33 (1.00%)

Although, this may be quite expensive for the regular retail investor, but given the opportunity to do so would be good. For starters to have the knowledge that these two basic strategies are available is already go as they can prepare to be included in their investment portfolio. And let's see how the PSEI reacts after a three day long weekend.

For as long as fresh appetite for volumes to increase with Foreign inflows, only then we would probably see a triple digit move.

Investing & Trading by CORRELATION is in fact complicated, expensive and still does not guarantee a 100% return on investment. However, properly executed strategies provide a greater probability of an overall net positive result. Where the end game of a positive total balance sheet is greater than the number of losses incurred. What this all means is to know how much of the wins you keep is important, and how much lesser you give back to the market is what counts the most. 

PSEI Market & Price Call as of June 25-27, 2018 - REVISITED For VALIDATION

Excerpt:
"...once such price action is completed then the probability of a relief turn around for now can be anticipated nearing the end of the 2nd quarter trading. It would not be a full turn around as a base pattern needs to be formed before an actual build up can be viewed with increase in volumes and fresh catalyst from external forces.

In essence a completed formation combined with other elements to support a greater probability of a full price recovery should well be present accompanied by a strong fundamental catalyst that would give the technical formation a solid foundation for a significant rally in the making. "

End result after the fact: After the price extension reflected twice at 6923 /6929 from June 22-26; the PSEI marked a 7838 high as of August 1st, 2018.

PSEI Extension

Likewise, the monthly chart shows the first low on the way down & higher low on the way up, the PSEI marked at 6923. Click here to revisit the overlay chart to have a comparative analysis of the price action where they came from a major correction before and after prices have moved  from the week ending Aug 3, 2018 Watch for our next market info share, where we define & identify how 'Investing & Trading by Correlation' with the other sector indices that extend and maximizes the profitability by tracking the PSEI components after marking a 6923/29 low; while trading a two (2) way open trade window with it's US counterpart #MSCI #EPHE Philippine #ETF registered 28.80 low in the US market respectively. 

It's all about #VALUE in trading & Investment Portfolio Management.

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Investing & Trading by Correlation: PSEI & MSCI EPHE

The sequence of slide information reflects how MegaTrade101 unique approach to investing & trading the Philippine Stock Market.

A complex yet an effective process that is based on the correlation of ‘Price Action’ that tracks the PSE Index, category sub-indices and their respective underlying stocks. Focused on each stock weighting and percentage distribution in the indexes. And maximize the market potential of trading the MSCI EPHE ETF in the US market.

Arbitrage & Hedge strategies are collectively applied whenever market conditions change unexpectedly. Thus providing a higher degree & probability of success in trading, by way of adapting to a variety of market conditions. Take note of the dates on each slide to follow the sequence.

Having a unique and effective perspective defined here, investors and traders alike would know their respective tolerable limits on the decline based on the real true average range on a daily / weekly price move. And properly time a short or long position to offset their current loss one trade at a time. 

As individual investors has their respective levels of tolerance, account balances, objectives and reasons for trading the stock / financial markets. This is where patience and due diligence comes into developing a market trade play for investors taking up the challenges in the market, where MegaTrade101 serves a medium for trading solutions and not simply rewinding

the news that is already wide spread globally. 

Related Info & Analysis

Tracking the PSEI & Trading the FMETF

Reflections: PSEI Price Action other than Trade War Jitters