Philippine Stock Snapshots (MEG,FLI,VLL,EDC,FGEN,PCOR,PIP,ABS) 3-20-2012

WTIC, AU, SG, China, Korea, Germany, London

One good indicator that Global Market is slowly growing is about the WTIC or Oil level. Since 2009 dip, Oil has rallied from 33 to 110 due to high demand in Businesses, exports and manufacturing that equals to GDP numbers of a Country. Since 2009, Oil is in bull market, and we expect Oil to rise on a slow uptrend phase together with Equities, and we will not have any problem for a Bull type market, worst case to happen is a hyper parabolic rally of Oil that can dismount the U.S. growth and other Country’s GDP.

Medium Term: Uptrend and 90 Support.

Short Term: Support at 100.

Overall, based on Elliot Wave Theory, current movement is based on the expected short term correction for weeks-few months, and may resume uptrend once Equities get back to fair value and European worries lighten.

AU is still in a Diagonal Triangle Pattern, and is gathering strength for its breakout above 4400 level, Although GDP expectation came only at a half, this country is still strong in Asia. At 13.50X P/E Ratio, AU is competitive and investment wise attractive. AU needs to make sure their GDP numbers retain and grow in the future to easily reach 5,000 level.

Medium Term: Sideways. Need to breakout the 4400 resistance to return to 4650 , 4750 then 5000

Short Term: Immediate support at 4250, but has a chance to revisit the sideways support at 4100, 4000. Accumulate near 4250, and stop when it breaks down, accumulate again at 4000-4100.

HK gained 20% already since the start of 2012. And the negative divergence seen on the daily chart suggests that correction is coming, at 9X P/E, its still one of the cheapest and easiest to trade in Asia.

Medium Term: Strong Medium Term uptrend support at 19.8k. Still in long term downtrend.

Short Term: In correction mode, first light support at 20.6k, then start accumuating near 19.8k support.

China may have bottomed, and had a soft landing, 2012 forecasted GDP is at 7.5%, and still spectacular compared to European Cities with GDP of less than 0.5%. at 13.5x, this could help HK to be back soon into 22k or 24k levels.

Long Term: May started to Uptrend

Short Term: immediate support at 2350-2400. If it hit below, may resume short term dowtrend.

SG is now at 9x P/E. Attractive enough to buy into dips. Economy in this country is intact, and poised to grow slowly in terms of GDP numbers.

Long Term: Downtrend to Sideways

Short Term: Uptrend and in correction, 1^st light support at 2900, then 2780. If it falls below 2780, can be said as Longterm/Shortterm overall dowtrend.

Korea now at 16.5x, slightly higher compared to other peers, Charts look good and in long term uptrend.

Short Term: 1^st support at 1930, then 1850 uptrend support. If it falls below, its a completely different story.

DAX and FTSE now in same pattern, the most important happening last week was DAX and FTSE failed to breakout of their initial long term resistance at 7000 and 6000 respectively. Both are at 10x P/E Ratio, individual companies are earning good, very attractive, but GDP nears recession like levels below 0.0%. An immediate Default will turn these countries to downside. Avoid for the meantime.

Long Term/Medium Term: Downtrend and failed to be back to 52-week highs.

Short Term: DAX : 6400 immediate, then 6000 uptrend support. A visit below means breakdown.

FTSE: 5600-5700 immediate, then 5500 uptrend support.

Philippines and Malaysia: Brightest stars in Asia

For Philippine stock traders who don't monitor Asia/Europe/America Equities. Philippines and Malaysia Funds who are listed in several big firms like JP Morgan, HSBC,etc. ranked Top 10 on best return yield(Equities) for 2011. Philippines hit top return for Asia.

I guess there are a lot of believers here in Philippines, or is it just that Philippine Stock Market is full of haux and speculative market movers?

We all know that only less than 1% of the total population in the country trades in the Philippine Stock Market, and most of them are big hedge fund managers or Business tycoons. We may not know what they are thinking in terms of Asset Growth. But only in the Philippines, they can shoot stocks up to 10-100x their value in just 6-18months (LC, GEO, NI, UBP, AGI, MER and so much more).

With the current Price to Earnings Ratio of PH. It is now at 18.50, most expensive in Asia. And the only one in Asia to make an All time High. For the past few days, U.S. and Europe already started a slow-to-medium speed correction. What do we expect then to PSE?

Technically speaking, all countries (US,Europe, HK,AU,PH, Singapore and others), got a Negative Divergence, meaning, a technical indicator that accumulation/volume is decreasing, and a possible correction is coming.

If U.S. and Europe corrects 3-7% in the next few weeks, we also expect PSE to take a breather, or even higher than 7%. Remember that the 3700 to 5000 level is a 35% rally without any pause. a 10% or more correction is normal and helpful to this economy.

PSE has lots of light support, starting with 4800 level, then 4750, a much stronger support pegs around 4550-4600 (The 2011 Highs). In any case that Market corrects to these levels, just assume first that PSE has only reached its "FAIR" level.

4750 level is a good entry point. and 4550-4600 is a better one. A visit to below 4550 is a completely different bearish sentiment (and an even interesting Buying point). Choose your battle. I prefer to buy HK, AU, Singapore Market at the meantime for their cheap P/E Ratios.



Malaysia is now at P/E 16.50, almost same level to Korea. Malaysia is the next Country to revisit its 2011 Highs, we can see on the charts below that it formed a double top. And may take a good opportunity on the possible correction to take a breather and follow PSE's footstep once it also breaks out of its All time High (Double Top).

MY is still a growing economy, and compared with PH, MY and PH stock market moves the same path for the past 5 years. Now think ahead, is it MY lagging behind, or PH overshooting?

I will post on the next few days other U.S./Europe/Asia Equity Analysis.