The chart below shows that MER (Meralco) is getting near it's 2-year uptrend support at around the 213-220 range. For the month of February, MER found a strong support at around the 216-220 range but always manages to finish a higher high from 235 to around 240 and its resistance forming a slope signaling an uptrend.
If worse comes to worse and the technicals won't hold true, MER could fall back down to its 5-year uptrend support at around 160.
Fundamentally, MER is a good long term buy. MER has significantly developed under the leadership of Manny Pangilinan in energy production, distribution, and customer care. MER is looking forward for further and massive developments in energy production and distribution in the next 5 years.
To start off, MER is going to put up a pioneering jet fuel/diesel/natural gas plant in Calamba, Laguna set to start on the first quarter of 2012 to produce 120-150 megawatts of power. The company also aims to produce 150 megawatts in 2012, another 150 megawatts in 2013, 600 megawatts in 2014, and 300 megawatts in both 2015 and 2016. MER is also in talks with 2 to 4 groups for possible partnerships in the future and is optimistic that they can offer consumers 5 kilowatt per hour rates.
MER is dancing around the 230 levels right now which for me is a good buy. As soon as their plans will start to come into fruition, MER could go as high as 450 in the next 1 1/2 years based on Fibonacci.
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