[Bear Market Special] PSEi Philippines 6-21-2018

Short Term Chart

Updates from our trades:

We entered 7,550 last May 2018 which eventually broke out of the declining phase. PSEi rallied strong and reached 23.6% fibonacci retracement, a good bounce of 5% gain.

We had a target of 38.2% fibonacci around 8000 level to close our trade, but shit happens. Well it was still a nice trade since we avoided the 9000 to 7550 drop (19.2%).

From a good upward movement, PSEi broke down its decending channel and broke below its medium term support.

Until now, we do not execute any trades. The position we took last 7.550 was only around 10% Equity Portfolio and the BSP did not take any quick action with regards to the interest rate hike of US. Foreign firms continue to dump our PSE index and most probably shorting it. Yesterday's 0.25% interest rate hike in PHP is too late already to rescue our index.

In layman's term, don't catch the falling knives YET. Look for possible support.

Medium Term Chart:

Since the "NEWS" call this aka Bear Market. with the reason that market already corrected 20-25%. We can safe to say that we technical traders join them as they speak, as we broke below the 2009-2018 uptrend line.

Long Term Chart

Long Term Chart also shows that this dive can hit really hard.

1st minor support 7000-7100
2nd support at 6500-6600
3rd major support (38.2% fibonacci of 2009-2018 bull market) -  6000-6200


All I can say is that, from my 10years of trading, this is a good opportunity for us to learn that stock market do not go in 1 direction, they also experience the typical correction or at most a bearish case scenario.

I am not a bear, charts above show us that worse is yet to come, and we should prepare for it. As good entries lead to fruitful returns.

Strategy Tips for this medium to long term correction:

1. Look for entry points where foreign sellers stop or pause. (sideways pattern)
2. Try to wait for BSP to ease the USD to PHP (53.30 as of 6-21-2018), cheaper USD will lead to better PSE index.
3. Don't be afraid to invest in these times, patience is the key.
4. Collect as may cash as possible, so when a good entry point appears, invest 10-20% of your portfolio. Do not place ALL IN in a single trade.
5. Diversify.

* My own target: I am gladly welcoming 38.2% retracement (6000-6200) before trying to trade this market with these reasons:
1. PSEi is still around 19x PE ratio (expensive in Asia)
2. US (DOW and SPX) are still trading near all time highs, what more if they broke down as well
3. USDPHP should be around 50pesos or below to make investing in PSEi valuable again.
4. Bear Market correction lasts around 6mos to 2years.
5. Bull Market in the world is now at 9th Year.

** Rally anywhere from 7350-7550 is a SELL. Foreign companies will not come back soon I believe.

So be patient and live happy!