7 Month Breakout for Lopez Holdings

Entered today on LPZ due to a breakout from a 7-month high.  As shown in the DMI, the up trend is strong; thus, would likely to continue further.  Breakout point is at 6.62, and ATR has been heavily buying at 6.66.  Hopefully they would provide enough support before the stock price goes high.  Prices closed strongly at 6.7.

On the fundamental side, MVP expressed his intent on increasing his hold on MER.  This may be one of the reasons for its bullish stride since LPZ is ready to sell its remaining stake of the power distribution company at a premium.  I think it is somewhere around 300-350 per share or even higher. (related news - Jan 2011).  On the contrary, as I was scouring the net for the latest news on the possible sale, it seems like the Lopez group would still like to hold on to its remaining board seat in Meralco. (news as of May 11 2011).  Interesting, huh?

Anyway, even without the Meralco story, LPZ have solid earnings coming from its subsidiaries such as ABS and FPH (parent of power generator FGEN).  Though for the comparison of earnings between 2009 and 2010, it should be noted that FPH has sold some of its shares of MER to the Pangilinan group (non-recurring income).  For the long term, LPZ can also be a turnaround story as they aim to wipe out their 100 million deficit by this year. 

This is just a momentum play for me now.  Will apply some trend following rules.

January 2011 Performance

I have increased my equity by 50% at the start of this year.  Though I am becoming more confident with myself as a trader with at least a few months of experience, the market isn't as good as it was 2 years ago (right after the subprime mess).

I will try to remain 20% (equivalent to my max hold to 1 stock) in cash on hand as my revolving fund.  One that could help me go in and out of a stock for better market timing.  Whenever I plan to shift my funds from one stock to another, this revolving fund would act as proxy and should be replenished as soon as I have finished buying and selling the 2 stocks.  This should add discipline to my trades.

For my first month of trading this year, it has been a tough one with recurring market declines.  Some even call it as the January effect.  Counting in the 25% increase due to added infusion of funds, I was able to get cash profits of only 0.56% of my total portfolio. 

January was a month for the 3rd liners, basically composed of speculative stocks.  At least I had a small bite with the "trash" play when I had a 1-day trade of ELI, and was rewarded with a 14% stock return.  However, I made a costly mistake with MPI, buying at its high.  I did some cut loss (not yet finished), which eventually narrowed down my month's profit margin.

Total equity dropped by 8%, mostly because of my hold on MPI and FDC.

Summary:
Cash gain:  0.56%
Portfolio gain:  -8%

Slowly but surely, I am trying to practice more with my TA with the use of different indicators aside from the common MACD and RSI:
DMI
STS
RVI
CCI
Parabolic SAR

I hope I could get better with this.

Here's a look on the latest chart on the PSEi.

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.