Trader’s Logbook Philippines Stock Market Stocks Worth Watching May 27 – May 31, 2013
Last week we saw a disturbing price action when PSE index plummet last Thrusday. We saw some stocks recovered last Friday but is the storm gone? Let’s see. This week we will be looking at EW, FDC, FLI, MA and PNB for technical bounce. MA as we know it is not a stock we want to hold for a long at this time so if there will be a good price action, better to get away when you have some gains. Greed is not good for this stock. On the other hand, we have heard an old rumor alive again for PNB. This might fuel the price to go up. Let us now take a look at the technical aspect of these 5 stocks.
Trader’s Logbook PSE Stocks Worth Watching May 27 – May 31, 2013
EAST WEST BANKING CORPORATION (EW)
We saw a big drop on EW last Thursday (4.40%) following the bad news in the world wide market. The following day, it was able to recover half of its loss as it go up by 2.30% Current price movement creates a Harami formation on the last two candlesticks. This also triggered the buy signal on the RSI or Relative Strength Index which is at 43.61. Is the stock ready for a rebound? Based on our Fibonacci Retracement level (6-month time frame), the price is currently within a line of interest. Few months back this level was a resistance and now this acts as a support. In case this will hold then we might see EW go up to test the resistance which is the all time high of EW.
In case this will turn sour, support zone that starts at 34 will be our next support. You can test buy at 35.3 to 35.6 You need to monitor also if there is an active price action. Bullish reversal will be confirmed if we will have a large green candlestick or a gap up at the opening. Although Harami doesn’t have a high reliability for reversal, this pattern could be a preliminary to a stronger pattern which is the Three Inside Up.
FILINVEST DEVELOPMENT CORP. (FDC)
There might be a technical bounce for FDC as it touch the 23.6% Fibonacci Retracement level. This support level has been a strong resistance last month. After it broke early this month, it registered an all time high of 6.99 per share. For those who already have this stock, you may want to add but make sure your average price will not exceed 6.5 per share as it might place you in an uncomfortable situation when price will turn sour and hit the 38.2% Fibonacci Retracement level.
FILINVEST LAND, INC. (FLI)
For those who choose not to chase FLI when we ask last May 19 Chase or not to chase FLI? has been lucky as the price went south after hitting 2.27 Currently the price is touching the 20-day SMA line which acts as our immediate support. Is it going to bounce?
Although there might be a chance it will not hit the 23.6% Fibonacci Retracement level to get a better discount. That’s better than you have chased the price and now you are praying for the bounce. Depending on the price movement and candlestick on Monday’s close, we might get in the next day.
MANILA MINING CORPORATION `A` (MA)
Mining has never been a good stock to hold this year but whenever there is a technical bounce, we can always get some gains. MA has been going south for a while now and last Friday we saw some light after it created a Dragonfly Doji. This type of candlestick is not really a strong signal for reversal but we have seen last October that this Dragonfly signaled a good rally for few days for MA. Will history repeat itself or this is going to be a different story? Because of the selloff few days in a row, our RSI or Relative Strength Index has gone down to only 15.41. This is now at the oversold territory. Will this help realize the reversal?
Monday’s opening should be strong or intraday action should give us a large candlestick in order for the reversal to be confirmed.
MANILA MINING CORPORATION
PHILIPPINE NATIONAL BANK (PNB)
The same with the other stocks, PNB went down last Thursday by a big 5.16% at the closing. Last Friday we saw a positive price move with a buy signal on RSI. Is this going to reverse? Friday’s action shows that the bulls lacks strength as it wasn’t able to reach the 23.6% Fibonacci Retracement level any time of the day. I think price will move sideways but with bullish bias. A break from the 23.6% with good volume could bring the price back to its 52-week high or above. What could fuel the rally? A rumor maybe?
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