Market Correction, Rolando Mendoza And the ALI Super Sale

Yesterday's tourist bus hostage taking crisis brought about by former police Sr. Inspector Rolando Mendoza, has put the Philippines into the limelight on World News.  It is on a sad note that the situation ended into a tragedy.up:gucci bags

The market closed 82.74 points lower from last time,  a change of -2.29%.  Market consolidation had been expected this week due to having stocks on already overbought conditions.  Alongside with the recent bad news that had happened in the Philippines, most investors either sold down their shares or just took hold, bringing down most stocks into the red.  Market was down 36 points so far...

The big drop came from an unexpected move from broker ATR Kim Eng.  At around 11:54 pm, just minutes away to closing, ALI was still selling @16.08 when suddenly ATR began unloading @14!  1.4 Million shares of ALI had been sold during the pre-close period, an uneventful 15.25% loss for ALI shareholders.  Since ALI is included in the index, this brought about the remaining 40+ points down on PSEi.

The mystery behind this sale is that ALI is a well-performing stock, why sell at a loss?  Fundamentals are strong for most of the property stocks, it is expected that ALI would regain back to the top.  Lucky then for those who were able to buy at such a bargain.

One major theory on this sale is that it was a boo-boo on ATR's part.  With the new PSE trading system, the trader might have pushed the wrong buttons.  Instead of posting a buy, they posted a sale instead.  A costly mistake if ever it was true.

It's a good thing I have already sold my ALI after holding it for a month.  What worries me a bit is on ATR since I have a Mutual Fund (Equity) account with them.  And so I wonder, what the real story is behind the sale.

EDC Bought on 8/23 @ 4.88

Lots of stocks to pick from today, I didn't even know where to start.  Last night, I was looking into AP, a #2 on DS' pick of the week. AP's prices are currently below its EMA as it had a huge drop last 8/11.  Despite its current down trend, DS says its fundamentals are strong.  I hesitated to buy this morning because of a gap up on the opening prices. 

So I was scouring through the latest update on Tsupitero.com and I've decided to take on a blue chip stock this time.  EDC was on a buy on the dips.  However, at a previous close @4.89, resistance is already near @5.05 (support: 4.8).

At open, prices were playing at the 4.9 region and so I posted my bid @4.88 thinking there would only be a small dip.  I should've realized that the stock was still on the overbought region and it would consolidate soon.  As it turns out, I was too early to buy as the stock went to a low today closing @ 4.71.

chart from pse.com.ph

Note to self:
Never to be in a hurry in buying stocks at the open, especially when I have not studied it well.  I could have bought at a lower rate, probably 4.79 based on the previous drops EDC made (.11 drop last 8/19).  Besides, prices were already too high and away from the EMA.

As of 8/23:
close: 4.71
EMA: 4.71
RSI: 53.27
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I hope Tsupitero is right on this stock going to an up trend after this correction.  DS on the other hand is waiting to buy at 4.3.  3% cut loss level is at 4.73... hmmm, most likely I'll be holding this stock for long.

Foreign Investments in the Philippine Stock Market

Common PSE traders usually standby for the results on the US charts (DOW-J) to further anticipate what may happen in the next day's trading.  Just like what happened on 8/12, a drop on the DOW-J resulted to PSEI going down. 

PSEi 3,483.02     -39.70 pts.    (-1.13%)
Value Traded: Php 3.65B

Dow Jones  10,378.83   -265.42 pts. (-2.49%)

Yesterday's result was interesting.  Despite a drop  in the DOW-J, PSEi instead pushed further and is now on its highest level coming back from the 2007 crisis.  (On Aug 10, 2007 , the market closed at 3,525.81 before it came down crashing)

PSEi 3,593.60  +33.21 ( 0.93%)
Value Traded: Php 4.9B
Dow Jones 10,271.21 -144.33 (-1.39%)

The US Market has been lying low these past weeks due to some renewed recession fears.  The gain now in the PSEi is attributed to the influx of foreign investors in our market, shifting their hold to one of the best performing markets in Asia. 

I was among those who sold stocks near the opening due to the fear of the "DOW effect".  Stocks indeed dropped at the opening but eventually pulled back up at around 10am, even closing in the positive.up:gucci handbags

MPI Bought on 8/10 @ 3.03

 

chart from pse.com.ph

On 8/10, the stock opened at 3.06, bought my shares at 3.03, before going down to 2.98.  This was again a buy signal from Tsupitero.com with MPI having a sideways to up trend.  Later on DS of FM had this listed on his top 5 picks for the week.  According to DS, "MPI had a core 1H net income of 1.9B was 2.7X of 2009 income Php 716M attributable to Meralco and Maynilad contribution."

Considering the negative sentiment brought about by the drop in DOW last 8/12, MPI dropped only a bit to 2.91.  The next day was a turnaround as it began its up trend leading to today's high at 3.43.

Since MPI is now on a safe zone for me, I am now eyeing when to exit.  As seen on the RSI chart above, it has now reached 77 indicating overbought conditions.  Likely, it will consolidate soon to a new low.  I plan to sell it ASAP tomorrow while it's high.up:gucci bags

As of 8/19
close: 3.42
EMA: 3.03
RSI: 77.155

Target exit price: 3.45

Update:  on 8/20, with the drop in DOW, I sort of panicked and wanted to sell ASAP before prices go way down.  Sold my shares at the opening @3.37, a cut profit with 11.22%.
Interesting turn of events.  From a low of 3.34, it eventually pulled back up to a high of 3.46.  The whole PSE Index was even on the green.

ALI Bought on 7/20/2010 @ 14.25

 chart from pse.com.ph

ALI has been 1 of the first 2 stocks I have bought ever since I have started real time trading with the PSE.  It has been a very reliable stock for me as property stocks have been constantly on an up trend.  Tsupitero.com recommended a buy on the dips for this. So on the day I started trading, I got a bargain @ 14.25, the lowest price for the day.

Price gained momentum from 7/30-8/6 reaching a high @ 15.82.  During this time, I was already increasing my portfolio with new stock picks and maintained a hold of ALI which is already on the safe zone.  It began consolidating after, reaching a low of 14.8 on 8/13 (another blow from the DOW drop).

This week seems to be a good one as ALI pulls back to a high, closing at 15.6.  Although we should still take note that 95% had been traded at the 15.4x region.  There is still so much space for ALI to go high up, so I might hold a bit for a day or two before I finally sell.up:gucci bags

As of 8/18
close: 15.6
EMA: 15.28
RSI: 60.45

Target exit: 15.6 or higher depending on tomorrow's trade.  :)


UPDATE:
At exactly 1 month, I was able to sell at 15.68 on 8/19; though the stock even rose up to 15.9.  Gain of 10.04%

DGTL Bought on 8/2 @ 1.44

chart from PSE.com.ph

On the end of July, Tsupitero.com recommended DGTL if there would be a breakout, but warned against a breakdown.  Thinking this was a definite buy signal, I posted my order and got my shares @ 1.44 .  I bought too early, thinking that it would eventually pick up.  Eventually, the stock broke down the next day crossing the 1.42 support as low as 1.39.

It tried to find its way up again reaching as high as 1.48, but the huge drop in DOW on 8/12 made it go back to start.  It continues to swing sideways, still in a down trend.  My break even is at 1.46 and I hope it could go up soon.

Despite the dismaying performance so far, fundamental analysts has expressed interest on DGTL for the long term.  This was based on the recent earnings of the company; thus, stock prices have a chance to go up, albeit slowly, in the long term.  DS of Finance Manila even gives it a Target Price of 2.up:gucci handbags

As of 8/17
close:  1.41
EMA: 1.43
RSI: 42.24

JGS Bought on 8/6/2010 @18.28

chart from pse.com.ph

Tsupitero.com suggested a buy if breakout for JGS, having resistance at 17.25.   It was a bull week and I obviously entered late as JGS opened at 18.5 on 8/6.  I bought at 18.28, which was actually the pivot point leading the stock to a low of 18.20.

Citiseconline.com recommended a hold as of 8/11, having reached a high of 18.9.  The huge drop to a low of 17.9 on 8/12 was the result of the negative sentiment brought about by a drop on DOW-J. 

2 trading days after, the chart still shows an uptrend as JGS slowly climbs back to its previous position.  I hope this still continue as my break even is at around 18.50. up:gucci bags

As of 8/16

close: 18.00 

EMA: 17.89

RSI: 60.45

Parallels Desktop

Though I have recently switched to Mac, I still feel the need of having a Windows machine.  Most applications still rely on Windows, that support and upgrades come in too late for Mac users.

I decided to try Parallels Desktop, a virtual machine software that enables the user to run other OS (i.e. Windows) right through Mac.  I've currently installed Windows XP (SP3) into my system, let's see what I can get from here.up:gucci handbags

In a somewhat related note, I have downloaded a .nrg file, which is basically an ISO file under Nero (Windows-based).  To convert .nrg to .iso , I was able to use nrg2iso (freeware).



I tried to install a software which required .NET framework download.  My SMART Bro USB is slow it's a pain for the Virtual machine to download using the internet.

Engineering or Finance?

Yesterday, I got a message via LinkedIn coming from a headhunter in Japan.  He was referring me to an FPGA-related job in the financial industry.  My interest bar went up high.

One of the main reasons why I plan to take MS Finance is to be able to work in the finance industry.  As for my engineering background, I have mostly been involved in digital microelectronics, particularly with microprocessors and FPGA.  HDL (Hardware Design Language) had been my main programming skill set.  I worked in Japan implementing FPGAs for manufacturing research.  And now, FPGAs to be used in the financial industry?  Interesting!up:gucci bags

It turned out that the headhunter's hiring client was Nomura Securities (bought Lehman-Tokyo after the crash) and they plan to deploy a new system.  Btw, the headhunter was not just ordinary peon, in fact he is the director/ co-owner of Springboard Japan (HR consulting company).  Definitely a major deal.

I had a great email correspondence with the director, and so he was also able to setup a phone interview with Nomura within the day.  I knew that the interview could be technical and so I wanted to delay it the next day for me to have more time to prepare.  However, as I have already built rapport with the director, I thought that by being available for interview immediately would also give me plus points from the hiring client (it seems the position needs to be filled asap).  Eventually, I obliged for an interview at 6pm JST.

I got the call from a VP of Nomura, and I think it has also been phone-patched to the American counterpart.  It turned out to be a panel interview for me. The interview could have been easy if only the interviewers were the usual executives and not the techie ones.  Unfortunately for me, someone who have not prepared for the technical interview, the panel knows their stuff and was bombarding me with questions I couldn't answer.  The questions were not that difficult, really, it's just that... I have forgotten the answers!

It has been almost 7 months since I've been out of the industry, with no practice; totally forgetting about everything as I see myself already gearing away from engineering.  Some of the questions were even from our undergraduate research project and that was 3 years ago.  Actually, if only I have fast internet, I could have googled my way through as some questions were trivial.  For non-chemistry related majors, try answering questions related to chem way back high school. That was how I felt.

Anyway, even if my engineering background fits the position, it just proves that I no longer have interest in pursuing a career in Engineering.  Yes, I do still want to work in the finance industry, but definitely on a different field, probably focusing on IT and Finance.  This is not just a career move, it is mainly a move towards something I am passionate about.

At least for now that I assume I wouldn't get the job, there would be no dilemma for me as I will be starting my MS this September.  More time to be in the Philippines, trading on the PSE, and filling in this blog.  :p

Hard Exit

My portfolio is currently full having 4 different kinds of stocks and no more cash available for investment.  I allot 4 slots for my portfolio, but ideally I should hold on to 2 slots while half of my investment is cash.  Being cash ready would mean I can enter any stock that I would want to invest in especially when one goes cheap.up:gucci handbags

One of the major challenges in short term stock trading is knowing when to enter and exit.  Though I've decided to sell my ALI shares, it was unfortunate that with the drop of DOW, prices of shares went down.  Basically I'm currently stuck with all my shares now, waiting for the prices to go up again.

I've been holding ALI for almost a month now, bought it at a good price @14.25 and now it's current support is 15.25.  In hindsight, I should've sold it when it reached its short term resistance @15.8.  Now, it went down to support.

Seems like a major downtime for PSE today, currently 40 pts down as I write this blog.  Could've been a great time to buy.

Noob

As I am a newbie on Stock Trading, I am also still a noob on setting up my own web site.  I plan to blog about my daily activities in the stock market as part of my learning process.  Since I am also taking MS Finance starting this September, I might even blog about interesting facts regarding my classes.  Somewhat like a Project 365 in Finance.
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Well, for now, I am trying to setup my site having a subdomain (finance.scioncho.com) point to this blog which is actually being hosted by wordpress.com .  As for today's trading day, I'm still holding on to my portfolio containing ALI, DGTL, JGS and MPI.  I'm just waiting for ALI to go back up before I sell it to maximize my gain.

Anyway, that's all for now.  Hopefully you can read this at my subdomain sooner. ( If I am able to figure this thing out) :P

PSE Pre-Open

I just discovered that once you enter your opening bid on the Pre-open stage of the market (9am-930am), you can no longer modify your position until actual trading starts at 930am.up:gucci bags