Last week it was Manila Mining that gave us a good gain from our picks. It advances 14% for the whole week. This time lets try to check on PIP, PGOLD, VITA, MA, BEL, LIHC on which stocks we think will move upward and which stocks we need to avoid for the week. So here are the PSE Stock Picks for October 22 – 26, 2012… (Please read the disclaimer at the bottom of this article)
Trader’s Logbook PSE Stock Picks Weekly – October 22 – 26, 2012
PSE Stock Picks #1: PIP
PEPSI-COLA PRODUCTS PHILS. INC (PIP) – with its price at the top of the chart it virtually has no resistance other than the intra-week high of 4.92. That resistance was reached last Tuesday when RSI reached as high as 90 for that day. On our weekly chart, PIP still have a few more RSI to lose so that it will be in a comfortable level. By Friday’s close, our weekly chart registered a 93.79 RSI which suggestions that it is already overbought. This has to loosen a bit.
Candlestick-wise we don’t see any warning from the last candlestick. We could even see that the Bearish Hanging Man last 2 weeks ago was not confirmed. This means there is no immediate danger if you are holding this stock. Expect some selling pressure this week but I think it is just to loosen RSI a bit.
PSE Stock Picks #2: PGOLD
PUREGOLD PRICE CLUB, INC. (PGOLD) – still in an uptrend but looks like it is losing momentum. With the Special Stockholder’s Meeting still next month on November 22 and current price of 30.65 is near COL’s FV of 33, this may go sideways for now. If we will look at the weekly chart we could see a bearish signal waiting for confirmation. The last candlestick that was formed is what we called a Gravestone Doji. Although it has a medium reliability, we have seen stocks with this signal made a u-turn. But since our uptrend is not that steep then we could say that the end result will be a sideways movement.
PSE Stock Picks #3: VITA
VITARICH CORPORATION (VITA) still looking for the White Knight (or is it?) and while it haven’t surfaced, price may dip more taking a cue from the last 3 candlesticks from our weekly chart. Our middle candlestick, a Doji, has a confirmation for reversal. Based on the volume, we saw a big decline from last week of September this could mean that speculators are already tired of waiting for that White Knight. During the rumor about the knight price shoot up and RSI told us it is already overbought. Although RSI is going down, it still in a not-so-comfortable zone.
The relevance of a DOJI depends on the preceding trend or preceding candlesticks. After an advance, a doji signals that the buying pressure is starting to weaken. After a decline, a doji signals that selling pressure is starting to diminish. Doji indicate that the forces of supply and demand are becoming more evenly matched and a change in trend may be near. Doji alone are not enough to mark a reversal and further confirmation may be warranted.
PSE Stock Picks #4: MA
MANILA MINING CORPORATION `A` (MA) seems not finished yet. With just the first week of rally, MA still has the strength to continue but 38.2% Fibonacci Retracement level might be a wall that is hard to break. It was in the middle of the week that price went above the 38.2% level but wasn’t able to sustain and it declined further the next day. Last Friday, traders was in an indecisive mood whether to sell their position or just hold. It was represented by a Doji candlestick but volume is thin on that day telling us that bulls are just taking a breather. Looking at the bigger picture (weekly), bullish sentiment is still intact. RSI gave us a signal to buy.
PSE Stock Picks #5: BEL
BELLE CORPORATION (BEL) without fresh news from the BELLE camp or a rumor, its price may continue to run sideways within the Ascending Triangle. Just closely monitor this stock as you might be caught unprepared. A breakout from this pattern could easily be spotted by a price going up beyond the horizontal line (resistance) plus a good volume.
The Ascending Triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation.
PSE Stock Picks #6: LIHC
LODESTAR INVESTMENT HLDG CORP. (LIHC) We have said last week that its bullish sentiment is still intact but after looking at today’s weekly chart we see a Doji. Are we going to encounter a major headwind this week or it will totally reverse at this point. We also said last week that 1.30 – 1.33 might be a strong resistance area and based on the price movement for the week, it proved to be right. It tried to stay past 1.30 three times but failed.
SUN Securities, ANGPING & ASSOCIATES, PHILIPPINE EQUITY and CLSA PHILIPPINES, INC. still did what they were doing since October 1.
DISCLAIMER: THE MATERIAL CONTAINED IN THIS ARTICLE IS FOR EDUCATIONAL PURPOSES ONLY. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY SECURITY. WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE AND IT SHOULD NOT BE RELIED UPON AS SUCH. WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY INFORMATION OR OPINION CONTAINED HEREIN.