MPI, RCB and JGS 3-27-2011

The recent short term breakdown of MPI from its 3.30 support has left this stock selling massively at 3.11. Using 2010 earnings, PE ratio is currently at 15, below its historical average of 17 PE and overal market current average of 16 PE. (The recent 3.11 dive was caught by its strong uptrend line and short term dowtrend with RSI of 27.) Resistances, at this point, is at 3.30- the breakdown pivot- and breakout at that level can bring us to a slight resistance of 3.50-ish and eventually to our year-end target of 4.00. BUY- Accumulate if it consilidate near 3.11



There is a new possible uptrend support for RCB. Last time in our http://theamazingchart.blogspot.com/2011/01/bdo-rcb-mpi-1-30-2011.html, we had a BUY rating if price hits around 24 after breaking down from 26, but it only managed to get to as low as 25 only. Last week’s news of World Bank buying 4% stake in RCB ignited the stock’s price and shot up to 28.80. This week, it managed to escape the 26.00 resistance and is posing to breakout of its wedge pattern. A clear breakout at 27 can send this stock to an initial resistance of 28.8-29.0. And then to its 52-week high of 31. Currently, I think this is the cheapest stock in the banking sector so far. The others (BDO, PNB) already started the upward race, and RCB might be well on its way. BUY near 26.0 support




Growth of JGS might be on the slow pace this year mainly due to the impact of high oil prices on CEB, slower growth for RLC, among others. Techincals seem like on the neutral rating. With a very strong resistance around 22.50-23.00 and another strong resistance in 25ish, but its negative divergence last October 2010 might still have some impact on its short term outlook. NEUTRAL rating for this stock.

DOW Daily and Weekly and PSE 3-21-2011

DOW short term downtrending since Feb 22,2011. The downtrend did a total net correction of around 6.8% from the 52week high of 12400, and from our expected correction of 8-10%, this seems to be a good entry point already. Seeing the Daily Charts, the DOW went to as near as the medium term uptrend support of 11500-11700 and went into an oversold RSI level. I managed to buy and went 30% in on that day itself when DOW hit 115xx intraday low, feeling that it might be the short term downtrend bottom already.

In terms of Elliot wave Analysis, It’s a clear cut picture with 2 more possible scenario.

1. Allotting wave a,b,c in the chart simplifies it’s the short term bottom already for Primary Wave 2 and we are going into the Primary Wave 3 enormous rally until May 2011.

2. We are still in wave a, and wave c is on the moves to get another round of 3-4% downturns into a max 4 weeks timeframe.

Analyzing DOW’s Weekly Charts, That quick selloff gave us a weekly RSI low of 40 on this bull market, usually selloffs below the neutral level of 50 gave only 2 scenario:

1. A good correction

2. A slow hint that equities are shifting into a downtrend scenario.

But at this point, I strongly believe that we already got the correction we were expecting few months back, and our bull market continues. A visit back to the 11500 support would be a 2^nd opportunity to get back into the market.

PSE 5month continues decline is also hinting that we already hit the bottom in this medium term downtrend. Over the past few weeks, RSI and MACD is hinting a good positive divergence, and this correction gave us a good entry point again sending few bluechips to an area of 10P/E ratio. (FGEN,PIP,FPH - to name a few). Others which are highly overpriced for a PE ratio of 20-30PE still strong and not convinced by the downtrend (ICT,SMB,PCOR, JFC – to name a few).

Major resistance waiting to light up this market is on top of the 3970-4000 resistance, a breakout of that will lead us to 4200 strong resistance level that can temporarily pause the market and so on to hit the 52 week high. At this point in time, a correction behaviour to 3600-3750 or even 3800 is a good “entry” level plus the rising MACD/RSI and 200MA.

Personal Disclosures:
95% : 5% cash- PSE market
55% : 45% cash- Asian Equity Markets

Disclaimer: some charts are used for presentation use only.

EDC,FGEN,PCOR,SMB 3-17-2011

For the past few months, EDC has been tempting to break out of its 5.90 and 6.20 resistances and late last week, it successfully did. Currently, there is still a slight resistance on 6.25 to 6.30, but the crucial resistance of 6.20 has been already taken care of, so I think that this stock is already in the uptrend phase with target resistance standing at the old high of 6.50. The recent oil price hikes have minimal effect on EDC/FGEN since these are mostly Geothermal Power Plants. There is a probability that they might get some downgrades due to higher costs but in the long run, it’s still earning at a good 14 P/E ratio. Accumulate below or near 6.00.
Overall, this has proven that EDC is in long term uptrend, with heavy long term buyers on 5.40 last year and 5.70 to 5.80 recently. At the end of the year, if it breaks out of 6.50, we can expect it to come close to 7.00-ish. Remember that FGEN has an option to buy EDC shares in 2011-2012 at a premium of 6.19. (Special thanks to Jonard (http://pinoysmart.blogspot.com )for clarifying the options price).

FGEN, the baby brother of EDC is still in short term downtrend, but a very minor one, downtrend resistance is at 12.10 or close to that. Tsupiteros can short it near 12.10, but for long term traders, this one has a very probabilty to breakout as early as next week, breaking out of range can lead it instantly to 13-14 which can copy the current behavior of EDC. Accumulate near 11 if it still in short term downtrend.

PCOR, the 2Po news has gone down, and subsiding hype of this stock sent this hanging also. MACD is negative, and its earnings is way to overpriced, the lifeline of this stock depends on the 2po, and not the earnings itself. Currently, I suspect it is forming the flag pattern, which can send this stock to 18 in few months, but treat it an opportunity to get out. Watch out and Avoid, as 80% of these scenario goes for a breakdown.

SMB, same with PCOR, the hyped 2PO is sending this stock to an overpriced situation. Clearly MACD and RSI is heavily negative divergence, and its still an uptrend??? Can be tradable at the peak, but watchout, if it gets a breakdown, it will surely dive back to 20s or below. AVOID.

PSE and DOW 3-13-2011

We finally found the bottom!! With PSE crossing with 200MA as a support last week, and rising MACD and positive RSI Divergence seen after the week, I see PSE bottomed out already or still in the process of bottoming out. I prefer it in its bottoming out period, so that there is still chance to revisit even near 37xx or even flat 3800. Then here we go all spend our cash and dive into the market.

The market really just did the correction phase for the past 4 months since we really have a very high PE ratio of 20-22 when he hit the 4400 for PSE. Imagine MBT hitting 84, while its only earning 3-3.5 Pesos per share, SMC hitting 190 with just 5-6pesos per share earning and so on. I think this market now is reasonable after all the 2PO and hyped stocks in the market. For now, it depends on the individual stocks to outperform well and show they deserve a higher buying price.

I will explain further below the tanking Method the DOW should behave in order for us to NOT get a new weekly lows. Even though we still expect up to 5-6% correction, I really think a few downtrend days really is a good opportunity to enter the market.

After the Low of July 2010, the U.S. market did really good in terms of its equities and earnings of each companies, but getting a straight 30% from 10 months is NOT a good behavior either, so we did expect this coming correction that may last for just few weeks or up to 2 months. And it did really correct just after Feb 22. Having a computation how many days/weeks are we in the correction phase, I suggest we are in the 2nd to 3rd week of the correction.

Using Elliot wave analysis, I have illustrated with the Chart the possible direction of this correction, which has a target bottom of 1-2 weeks from now. Around near end of March.

BUT... with Saturn, the Sun and Earth lining up into the same Axis. I am somewhat scared if it could really bring disaster to our beloved Earth which can sweep all the gains and end this Bull market ASAP, OR with so much hype, there will be a sell off into 3rd or 4th week of March, and no disaster comes, everybody gets back into the market and continue our bull market, and can make the scare a good entry point to get back into the market.

Lets see and God Bless our Mother Earth.

MPI, MEG,FLI,GMA7,BPI 3-10-2011

MPI, the only stock which is still in short term and long term uptrend, SLEX and NLEX income havent been reported yet, and investors are still complacant at this stock and havent been going down a lot lately, in fact the recent 3.4 drop is a good buy for bottom pickers. BUY rating when it goes back near 3.40, with a resistance and medium term target of 4.0 and long term resistance of its old highs 4.20-4.30.

MEG is also in short term downtrend line, and long term uptrend line seems to cross near 1.80, currently, it needs to breakout of 2.30 or so in order to trend up and be back to 2.79 highs, but I still doubt it at the moment, there is no good news yet if Sales have still risen as Key Rates havent increased yet, that’s why there are property sectors who doesnt move up yet. BUY near 1.80, and sell around FV of 2.30-2.50 medium term.

GMA7 long term is downtrend, slow downtrend one, if this really had the chance to hit the long term downtrend resistance of 7.5, I will surely get out first. But we might not know, its gaining momentum vs ABS, and with EPS 2010 of .60, its way cheaper than its competitor ABS. HOLD rating and SELL upon 7.5

FLI, its long term uptrend line really held the stock when it got 1.03, and assumingly, the 2010 EPS ratio of .13 really make this a 8PE ratio second liner, even though we lower the targets for 2011 and 2012. I still believe a fair value of 1.3-1.40 or 10PE ratio is waiting just around the corner. Buy and accumulate near 1.03

BPI is short term downtrend also, but not a very steep one, if this stock went to 56, i will surely short it first, a breakout of 56 means going back to 60. But for me, with its EPS ratio of 2.xx also, 60 is really slightly overpriced. HOLD and sell near 60 long term.

PIP, VLL, BDO 3-8-2011

PIP had a recent breakdown with its 2.50 support, but sustained the 2.08 with its heavy support at 2.00, this was still a good stock with EPS of .35 for year 2010, a whooping around 8PE ratio, but the only problem is that Sugar pricing raised to its bubble price, and commodities are forming a bubble also, still PIP is still cheap even though we lower the EPS for 2011.

BUY - Trade the range from 2.08 to 2.50 resistance. A 20% return.

VLL broke down also when MEG, FLI and other properties did their own breakdowns, VLL is still heavy short term downtrend, and major support still pegs at 2.20, with this kind of market, we are not sure when we are going to breakout and get away with short/medium term downtrends, but at 2.20, this is earning .30 EPS for 2010, even we lower it, its still a good buy, the interest rate increase and lowering sales targets are the only threat to this stock.

BUY in dips and oversold levels and sell on resistances.

BDO looks so good in the charts, I can assume that i held its 46-47 major long term uptrend support, it is now playing around 49, and its still a BUY for me if it goes below 48. At 2010 EPS of 2.58, 18PE ratio, above the average, still the 2011 growth could lead this to 60.

BUY and accumulate 48 or below and sell 53 short term.

DOW and PSE 3-5-2011

DOW long term uptrend, short term downtrend, and looks like this downtrend will continue for a valid reason that the 12400 peak was already the Primary Wave III, Major Wave 1, DOW trading may be choppy for weeks time, with expected minimal rally, i’m betting on the short term downside for the upcoming few weeks, and short term and medium term support pegs at around 11,500 for the DOW. Around 6% more correction, we already had the 4% correction, so total of that 10% correction will be giving us a health market. Drop below the short term support line 11,500 will have the chance to give us huge downtrend turns of 10,000 to 10,500.

PSE market downturn slows down, and trend looks good with controlled drop with the market, I’m still waiting for TEL’s special cash dividend to be given to all, as we might get another 0.5-1.% market downturn if cash div is given. Overall, PSE looks so good, and looks very interesting to get into, short term downtrend is slowing down and long term/medium term support is really near the 3600-3700 area. I’ll be waiting for DOW’s overdue correction and TEL’s dividend before getting into this market and placing long term bets.

You know whats the good thing here? Daily RSI triggered a buy signal with its positive Divergence on RSI and MACD, the first time it happened in this months downtrend. A good signal that the downturn might see an end soon.

WTIC crude oil, SSEC and HSI markets 3-3-2011

WTIC Oil sparked when there was conflict in Libya. WTIC long term is overall in uptrend, with possibility of visiting the 148USD all time high for oil and expected to end its peak rally around 2012 and 2013 Oil market peak. Overall, at this moment, I think we are far from that peak, we are long term uptrend, but a very narrow one, upon hitting 103, charts say that it might already be the peak in short term outlook backed up by the weekly chart’s overbought RSI, with support of around 88 then 82 for oil. The sad and very cautious thing is that, if conflicts still occur, it might breakout the linient long term uptrend line and create a parabolic wave to 148usd highs and trigger high inflation that may cause possible double dip of this bull market or early end of this bull market run.

SSEC short term downtrend still in place, and waiting mode for U.S. economy, China is one of the countries that really fights inflation by raising interest rates to back up their demand globally and their overwhelming GDP. I'm not sure either why this country is in short term/ medium term downtrend, despite its good GDP numbers. Charts tell that in months time, there will be a very huge thing that will happen, I believe its a breakout to its new highs. Watch closely the narrowing triangle lines, and long term support is at 2700 which is a good entry place.

HSI market same as SSEC, downtrending since Oct 2010. Are they the one to lead the new highs and start moving up ahead of DOW? let us see, from my perspective, these 2 markets were already having a lot of correction and are ready to blow in few months time, HSI still uptrending with a resistance of 26,000 when it breakout to its new high. Chinese markets are still reliable at these times and looks pretty cheap when it corrects more (5-10%) with uptrend support of 22,000.

Disclaimer: Charts belongs to A. Caldaro, it was used for presentation use only.