UpdateD: The Unexpected Market 4-26-2011 (5-1-2011)

UpdateD:


Our PSE Market is astonishingly sooo strong that it made a non-stop rally for 1.5 months time. All the 5 months correction period was recovered up in a very short span time. CLAP CLAP CLAP!!

I must say its Unexpected, but really scary of what may happen next. I still believe 4,400 level is a hard to knock resistance which may take months or quarters. So I have been unloading for the past 2 weeks.

Its my first time to share my holdings , and my recent PRE and POST Holy Week trading executions.

Mostly I've been doing the SELLING:

	Average Entry Price	Average Selling Price
EDC	4.6	6.80
FGEN	10	14.50
FLI	1.2	1.34
PIP	2.12	2.48
AC	330	380
MPI	3.19	3.65

And some BUYING:
EEI at 3.70
CMP at 1.60

Current Holdings as of 5-1-2011:
PESO:
FGEN, EDC, MPI, FLI, MEG, EEI, GSMI, SPH, COAT, CMT, RCB, BDO, BPI, T, GMA7, GMAP, PIP and MBT (20% cash).

DOLLAR:
70% - Asia Pacific ex. Japan Funds
30% - Cash

PSE market and Dow Jones 4-20-2011

Our PSE Market closed at 4274, Above the 4250 resistance level and a very noticable high RSI with negative divergence. Market today is very sluggish with no major moves, except for the huge increase in Mining and Property stocks (breakout confirmed for ALI,MEG,FLI), are these only the small time traders trying to pull up the market? As I assume huge traders are already in "engradeng-vacation mode".

We were trying to define and forecast the movement of our PSE market last http://theamazingchart.blogspot.com/2011/04/pse-market-update-4-3-2011.html , If this is indeed really a breakout of 4250 level, I did not expect this rally to hit 4400 in just 1 month rally, I expect more before we can hit our All time high 4400. Let us see next week if we really did breakout the 4250 resitance towards the 4400 level. Wait till the big investment firms move so we can decipher the correct trend of this market.




U.S. Credit Rating has been downgraded last Tuesday which caused the 1% down for a day, yesterday, market closed on the Positive region trying to get a hint that we already had the short term correction, with the help of Elliot Wave analysis and charts of Mr. Tony Caldaro, I also assume that we already hit the Primary Wave 3 - Intermediate Wave1 - Minor Wave 2 correction, Usually Primary Wave 3 in a bull Market is the longest rally of all waves, but the only concern for me now is the Negative Divegence formed at the 12,500 level.

We are still in a bull market and uptrend cycle, must hope that this Negative Divergence be passed out in order to breakout this 12,500 level. Next stop is 12800 and 13200 assuming a successful breakout (target for Minor Wave 3 and minor Wave 5 respectively).

Happy Lenten Season!

BPI and PNB 4-13-2011

One of the big banks who lead this PSE rally to 4250 resistance is Bank of the Philippine Island. It came to as low as 53-54 when we were in the middle of the Japan earthquake crisis. And last Friday-Monday, it got knocked out again into its all time high resistance which were encountered 2006, 2007, late 2010 and late last week for 2011.

At first, I saw BPI hitting 60.85, without any hesitation to sell it, but was really a temptation for its overpriced status - a hefty 19 PE ratio, and early this Monday, I was just looking into its Chart and noticed thats its been BPI's all time high around 60.85 area, I was chasing into selling this stock last monday at 60.0, but went down strong end of the trading period.

Now its running around 57.xx, And is in correction phase to gather strength in order to try hitting that all time high. But in my own opinion, with last year's 10B stock offering, this Company is currently under pressure to make those 10B a sellable loan to the public (Notes,bonds, Corporate Loans). Also, it ended the 2010 at 60, and BPI's CEO forecasted a target growth of 15% for 2011, so meaning BPI's yearend price for 2011 is 69 pesos? For me, the 60.85 area is still a major resistance and a selling point as of this moment.




Another high flyer bank is PNB. This stock went to as low as 45 pesos during Japan Crisis. honestly, I dont know where this stock is going, Technicals is not clear to have guide with either, yesterday, it was just tempting to higher with the 65.4 resistance, and successfully did close higher at the bells. Today, it hit 68.xx with a flat RSI at 70.0. HOLD rating, specially its 2010 EPS is only at 4 per piece, 18 PE ratio, which is currently the average PE of all banks.

Oil Market and DOW JONES 4-8-2011

WTIC oil currently hit another 52week high to 111.0 usd. Last time, the big 3 raised pump prices when it was still in 106usd. So what do we expect again next week? Sadly, Higher gas prices again.... Even though our USDPHP currency dropped to 43.09, the 5.0 usd gain in 2 weeks is around 5% increase in World Market.

We were already pawned last 2007 with 65per liter gas, Is WTIC likely to get 31yr high as what Silver did?? what’s next to us if WTIC went to 175(25% more from 2007 high, 65% more from our current price, so 80pesos per liter.. ouch)??

To have an overview forecast on what can we expect on Oil if the uptrend continues, I have drawn different color lines in the graph to show 1 year timeframe for each color, At this uptrend phase, we expect Oil at Mid 2012 to be AT LEAST 130USD per barrel.

So in terms of computation as of today, we are again waiting to be shredded by high flying inflation, an estimate of 5% increase in world market, and 1% decrease in currency cost, thats around 4% increase with estimate of 1.5-2.00 pesos increase again...

Anyway, as inflation rises, stock market rises, BSP rate hikes, Interest rate hikes, Property sales gets pressured. And when inflation gets to its “parabolic” phase like what happened last 2007, Everything above follows, until people can’t afford to drive cars to the office, companies get very small earnings due to higher cost, unemployment goes up again and pop! Bull market ends.

INDU is now running at 12400 level, back near to its 52 week high. We manage to get the bottom when it went down into an intraday low of 11500. Sadly, I was able to get into Asian Equity funds by 33%, I was left 66% cash underestimated the strength of the market.

And now, INDU, SPX, and Nasdaq are all in Long term and short term uptrend cycle, with a semi Negative Divergence in RSI, we may expect a slight correction, but in my own perspective, INDU is just gaining strength and will remove out that Negative Divergence with strong gains.

With the strength of Commodities, and with my past experiences, they two come along together. So if commodities are still in strong uptrend. Just follow the uptrend cycle and the formation of “this decade’s early Bubble” with projection of early 2012- early 2013 peak. Just make sure that you are earning more in equity than the increase of Gas Prices :D

PSE Market Update 4-3-2011

We did discuss last March 13,2011 that PSE already had the bottom (http://theamazingchart.blogspot.com/2011/03/we-finally-found-bottom-with-pse.html), and it already did!! Congratulations to all PSE stock owners who patiently waited on the sidelines and attacked during the time we forecasted that we've seen the bottom! Cheers to the ones who bought very cheap, let them chase the prices, so we'll have enormous gains! :)


With the hype of PLDT buying DGTL and hyped increase of profits of GLO (Nah!!), it helped us manage to breakout of the very very strong downtrend resistance line in 4000-which took around 5 months to bottom out.

Looking into the short term status of our very own market. RSI is quite oversold at 74.91, Next stop is around 4250 resistance, but as early as now,we can see some people shorting with the quick 5-10% gain within 1 week. I have drawn above the possible scenario our PSE market may take place in few weeks time, and it would not be that easy to get into our 4400 52-week high very fast, time will take, and if there is any chance that PSE market will fall back into 4000 territory, take it as a chance to enter the market for this new uptrend channel.

Summary per Sector:
Energy - strongly uptrend
Conglomerates - the breakout of AC from its 380 resistance makes the big blues all uptrend
Banks - BPI did the breakout of 58.50 resistance last friday, somewhat, we expect BDO and RCB to follow.
Properties - still no signs of breaking out, but watch out as they are the only ones not going up yet.

US Dollar Index and EUR/PHP 4-1-2011

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First of all, I want to congratulate the Philippine Composite Index ^PSE/^PSI for Yahoo! and $PSEI for some institions for breaking out of the 5 month downtrend channel last Tuesday (March 29th). Breaking out of that 4000 level was one big thing, see you in 4200 resistance with light correction, and hopefull to our 52week high of 4400. :)

And as for currency traders, I have attached above the Monthly Chart of US Dollar index, eversince the ASIA or EMEA became competitors of the U.S., its currency was on a very long term downtrend channel. In our charts, the downtrend line was since 1985 to current, which indicates the very strong downtrend line. This US Dollar index is widely used in Currency trading, especially the #1 competitor, EURO $. Other affected currencies are GBP, JPY, AUD.
But for Philippine Peso, it doesnt affect much.

So lets dig in into the short term projection, US DOllar index is now cliff hanging into its immediate support 76, failure to hold means another set of lost of value for USD and gaining momentum of EUR. Placing my bets, 80% I think, we will sustain that level and bounce into near 80. Which my estimate for EUR/PHP is around 57-58 in few months. Currently, EUR/PHP conversion is 61.5. Failure to hold down into the 76 support means instant downward mementum to 70 (in my current computation, that's an instant jump to 65 pesos per Euro).On my part, I am still expecting the USD Currency to appreciate to near 90 or 100 in 3-5 years, which is around 46-50 in EUR/PHP Conversion (my estimate is based from USD/PHP MUST be around 40). That's a cheap weakening of EUR in long term, which is really benificial for Louis Vuitton lovers to buy their bags fresh from Euro Zone. Short term, the EUR is still involved into going up as EURO equities are in BUll Market, So wait for the appreciation of USD and depreciation of EUR before diving into its currency -if you can wait for the years time (long term).



Charts belong to their respective owners, is used for presentation use only.
Currency is the hardest tradable entity around the world for me, as it takes a lot of measurement, GDP variation, Country vs Country currency basis, Current Equity status of each country, so exact value might not be as accurate as possible.