The Year 2010

I have been interested on equities ever since I was an undergrad, but it was only until 5 months ago that I have started actual trading.   Before, I was only into speculative trading (during the time of Pan Xenia's Stock Wars and up to my daily stock-trading simulations at work while I was in Japan).  Now that I have invested real money, I try to study technical analysis and monitor the market, gathering tips/rumors from other fellow traders online to help manage my trades. 

Below is the 1 year chart for the PSE index: (credit: ATR Kim Eng)

As can be seen on the graph, 2010 in general has been on the uptrend.  The steepest rise was on September to the beginning of November.  My first trade was only on July 20.  I had been in the Philippines since February, but I had just procrastinated opening an account with Citiseconline.  In fact, I had been procrastinating for more than a year now, even while I was having my short Xmas vacations in the Philippines.  The subprime crash of 2008 had already ended, and it could have been a good time to invest on equities at the start of 2009.

Anyway, going back to the PSEi, the index performed a year-to-date gain of 37.62%.  The index is composed mostly by blue chip companies and other sectoral representatives that could best describe total market performance in the Philippines. 

Since I have only started 5 months ago, I should compare my performance to at least the 6 month gain of the PSEi which is at 24.56%.  The goal of an equity trader is to beat the market, meaning to have higher gains compared that to the index or to any other Mutual fund available.  ATR Kim Eng's Equity fund, which I also have since Dec 2007, reports a YTD (2010) gain of 51.75% (wow!) or a 6 month performance of 26.55%, still higher than the index.

Given the above figures, my performance then shows a dismal rate at only 13.24%.  Actual profit gains (cash outs) are at 12.28%.  Despite the relative low performance, I should bear in mind that my investment cost wasn't all the same from the start.  In fact, I had more than doubled the investment at the 3rd month, which was already too late for the bull run; thus, in effect only diluted the figures.  My computation for my equity performance is basically just dividing the current equity value (or cash outs) divided by the total cost of investment, regardless of the time of additional entry.

Anyway, I would still like to stick with the current figures as my YTD performance, to encourage me more to surpass these levels next year.  These first few months in trading serves as a test-run for my trading system, considering that I am also now doing full time in graduate studies.  At least now, I am able to understand and feel the market; hopefully, leading me on to wiser trades on the following months.

As part of my year-end analysis, I shall list down what I had experienced below:
1.) I started as a short term trader, being able to monitor the market daily, as a bum (not working, but waiting until classes start).  As soon as classes have started, and going on from midterms to finals, I was no longer able to religiously monitor the market.  Thus, I have decided to shift from being a short term trader to a mid-term/long term.  Doing short-term trading while not being able to monitor the market daily would only lead me to losses and/or missing out on swings.

2.) I still have problems in cutting my losses, always hoping that stocks would rebound in a while.  Quite easy on a bull run, but bulls aren't always there.  I have experienced this during the market correction last Nov-Dec, losing around 17% from URC and 9% from DGTL.  If only I was able to define my stops (i.e. -8% in 1 month), then I would have managed to reduce my losses.

3.) I am still practicing with Fundamental and Technical Analyses.  Before I enter a stock, I should at least have studied it well.  "Trade with a Plan".

...
Others to follow.

Coward

Today's the last trading day for the year 2010, and I have been looking at PCOR and MER prior to the open.  I regret not looking at PCOR during its early rise since it is not only being sold on the news, but it has solid fundamentals too.

Right now, I am narrowing down my stock options to those who had higher Q3 gains compared that of last year's end.  PCOR's Q3 EPS is currently at 0.57 versus last year's 0.45.  However, at today's prices, its PER is now at 32x relative to current earnings.  Looking at the charts, uptrend may still continue but momentum has weakened.  RSI also shows the stock being traded at the overbought region. This is one of the reasons I have hesitated on buying at the open, despite its rise of around +1.1 (6%).

Personal Recommendation: Buy the dips.

 

As for MER, I have missed yesterday's price action and I've realized I still should have bought at the close.   MER gained a huge green crossing over its upper Bollinger band.  On cases like these, further uptrend is due.  Today, the stock reached a high of 230 which is around 4.5% gain.

The above 2 stocks featured had the same characteristic today.  They started up early.  I'm still not used to trading at the open, for fears that this may just be knee jerk reactions of the market.  PCOR slip may be forgiven, but with MER, I really should have stuck to my trading principles.

Still for MER, Buy the dips.

So I guess I should start pointing out my trading problems so far:
1.) Stop-loss (7-8%?)
2.) Trading at the open (what should be my policy here?)
...

New Year's Trading Resolution for 2011:  No Fear!

A Look on AGI

CLSA (323) bought up at the open and was followed by the other foreign brokers.  Both MACD and DMI generated BUY signals with some support on the volume.  ParabolicSAR shows that the stock is just starting on its uptrend, as confirmed by the change of trend in the DMI chart. 

MEG, one of AGI's subsidiaries had been pointed out to be among those involved in year-end window dressing, so caveat on the rise in prices of related stocks.  Also, AGI has been treading on unchartered territory this year, as it has been consistently gaining new highs.

But so far for me, buy signals with support from foreign investors is good for me.

PD:  I have AGI at a cost of 11.58 and has been holding this stock for less than 2 months already.

MER

I've been used to waking up early just in time to trade (before 9am), even if I have no classes (vacation!) thanks to the daily grind I had on my first trimester in grad school.  Ironically, when I planned to trade on a speculative stock like LND this morning, I wasn't able to wake up on time, missing the dramatic rise from its already high price of 1.16 to its current at 1.33. ( 14.6% rise).  I could have posted an ATO order, however, I would prefer seeing first if the stock would rise at the open.

I have also planned to blog about my readings on LND, however, slow internet prevailed once again (no thanks to SMART Bro 3g).  So this time around, as I have not updated much on this blog, I shall post my "analysis" on MER (Meralco).

I currently have about 30% cash in my portfolio, and I would like to maintain up to 3 core stocks on every trade next year.  So far, my top 3 picks for next year would be: DGTL, AP, and EDC.  These are based on their Price-to-Earnings ratio and also for the long term hold.  DGTL has been the apple of the eye of most fundamentalists, however, market sentiment hasn't catched upon just yet.  EDC is also still undervalued, however its rise is still slow for the common tsupitero.  As for AP, it has been one of the top gainers for 2010, and is posed to gain more though we shouldn't expect it to gain as big as it had before.

So going back to one of my picks for this week, MER is posed to breakout from its 206 immediate resistance, and hopefully beyond 220.

GTC Orders Are Back!

Got this announcement from COL (Citiseconline):

COL ANNOUNCEMENT: CitisecOnline GTC Order Reactivation.
- Please be informed that we will be reactivating the COL GTC Order Entry function by December 13, 2010. GTC orders are limit orders which are valid for seven (7) calendar days. This service will now be fully available for all COL customers again by Monday, thank y...ou very much for all the patience!

This is welcome news for busy traders like me, who no longer have the time to monitor the stock market religiously.  Ever since the start of midterms, I was not able to trade as much as I used to, due to the very tight schedule of exams and case studies.  Thankfully, with this GTC (Good-till-Canceled) option, at least I can post my trades with respect to my target entry and exit points any time during the week. :)

End of November --> Finals Week

The long-awaited market correction has finally come, and I have not been spared. On the beginning weeks of November, I was able to cash in profits coming from AP and ORE after a month's hold, with 33% and 20% gains respectively.

During the first dip of the market correction, AP and ORE have been among the few that didn't get affected.  I thought of selling my ORE to lock-in profits, then shift towards stocks that gained new lows; thus, shifting to DMC.  Turns out, the correction has not yet reached bottom, so for a few weeks, my portfolio went down to as far as -7%.

Though I didn't intend to, I was holding a diversified portfolio of 7 stocks; thus, was able to lessen the risks on the volatility of the market.  My hardest-hit stock is URC, which currently sports a -13% paper loss (even reaching -17%).  I can imagine now that if I would need to maintain lesser stocks in my portfolio, I also need to be critical of my cut loss points.

As of the end of November, my realized cash gains were 7.08% while the standing of my portfolio is at -5.41%.  As of this writing, on the first weekend of December, the market has bounced up, and I hope this would not be what they call a "Dead Cat Bounce".  I am looking for ways on how to reposition myself. 

So far:  (PD)

AGI - hold.  May now as well continue trending up.  Signals have just crossed on the MACD line.  This might be a good Xmas stock, as lots of people will surely flock the casinos in Pasay = good revenues. :D

URC - trading above EMA levels and nearing a MACD cross.  A hold for now, but ready to shift once a good choice would be decided upon.

DGTL - For the nth time, seems like the market is still not interested with the DGTL story.  The telco industry in general shows lackluster performance in the market.  This stock got hit by the correction, now at around 7% loss in my portfolio.  I need to reposition again from this stuck.

ORE - Supposed shipping for December has been reported to be delayed up to next year, thus stock price showed some weakness during these past days.  Although my hold for this stock are actually just residuals from a partial sale before, I really should find a window in taking profits from this.

EDC - Still at 4% paper loss.  MACD shows a resting phase, in which we may see a rise in the future if only there would be favorable news enough to push the stock price back to top.

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Seems like I will just be holding my stocks up to year end.  My first trimester in grad school is about to end, and I have been busy again.  I hope I would have more fruitful trades next year.