Index Stock Picks (Apr. 17-21): MEG, RLC, and URC

MEG, RLC, and URC's charts are looking great and are primed to go further north this week. Here are the charts of the three stocks:

RLC:

After breaking 17, RLC has been consolidating and moved sideways for more or less 3 weeks. It made 17 its psychological resistance. RLC had its first major price action in 2-3 weeks which may prompt a possible breakout. If RLC will break past 17, it will most likely post a new high. Unchartered territories are were stock prices surge fast. RLC's STS also indicates strength. RSI is not yet overbought and volume is good.

Buying Price: 17 or below (ideally 16.8 or lower)

Selling Price: 17.45 or higher

URC:

If URC breaks its resistance at 65, this is primed to break out. This has been consolidating for quite some time already and is ripe enough to go back up. Price action, volume, STS, and RSI are all positive. All we have to do is to wait for URC to go higher than 65. As shown in the chart, URC is also on its 20-day SMA which can also be considered as a support.

If 65 is broken, URC will be on a new all-time high.

Buying Price: 65 - 65.5 (as long as it is with good volume)

Selling Price: Whenever you are comfortable (be sure its higher than 2% to avoid commission loss)

MEG:

For a stock like MEG, its quite puzzling why did it continue to go down despite its good fundamentals and outlook. Looking at the bright side, it has brought the stock to a very undervalued level.

However, MEG already broke out from its downtrend resistance for nearly 2 months already and is starting to gain some serious momentum. Below is MEG's short term chart.

MEG has bounced from its uptrend support and at 61.8% Fibonacci (check it out). Price gradually went up in the last 2 days and a strong price is very probable within the week. RSI is still far from being overbought and STS may cross up. MEG's volume is also good and may increase if price will surge.

Buying Price: 1.97 (if price will gap up, 2 or lower)

Selling Price: 2.1

Stock Pick: PXP

The oil sector has been exemplary well this year. Stocks like OV and OPM (considering that these are third liner stocks) went up by leaps and bounds. Oil stocks have high face values and are expected to continue to go up. One stock in the oil sector is PXP.

The chart below is PXP's chart since its IPO last September 2011. Since it retraced from its crazy day 1 price action, PXP has gone up from P4 to as high as P14 in just a matter of roughly 5 months.

Why is PXP worth watching?

[1] PXP is currently on its all time uptrend support.

[2] PXP is currently on its 32-day SMA.

[3] From P10, PXP is currently on 61.8% Fibonacci.

Philex Petroleum Corp.'s 2011 net income totaled P537.5M. It's earnings included P271.4M from Forum Energy PLC, a 64.45% owned subsidiary, and a non-recurring gain of P443.7M from the restatement of the company's investment in Pitkin Petroleum Plc. when Philex Petroleum's holdings in Pitkin was diluted from 21% to 18.46%.

PXP's highlights last year included the completion of the first exploration sub-phase of SC72 by Forum Energy and the start of commercial production from the Brixton Energy coal project in Zamboanga Sibugay.

In 2012, Philex Petroleum Corp. is looking forward to the following:

[1] Commerciality of the hydrocarbons within the SC72 contract area;

[2] Develop a sustainable revenue stream from our coal business;

[3] Pursue new opportunities including a participation in the upcoming Philippine Energy Contracting Round

Stock Pick: MPI

For roughly a year, MPI has been moving below its trend resistance until it broke past it last December 2011 (mid-December) as shown in the chart below.

Interestingly, despite the strong momentum that the market has gained since January, MPI continued to consolidate.

Below is MPI's chart since breaking past the trend resistance.

It can be seen that MPI is still on a downtrend. However, there is a possibility of a reversal. Here are the reasons why.

SCTEX and NLEX - Metro Pacific Tollways Corp. (MPTC) allocates P2.3B for NLEX and SCTEX. According to MPTC president Ramoncito Fernandez, a bulk of the P2.3B (P2B to be exact) will be allocated for the Segment 9 road project which is a part of NLEX. The other project is the Segment 10 road project. Segment 9 will connect McArthur Highway in Valenzuela to NLEX while Segment 10 will connect McArthur Highway to C3 Road. For the record, MPTC controls the concession of the 84-kilometer NLEX.

However, MPTC is still waiting the final word from Malacanang for SCTEX.

MPTC subsidiary Manila North Tollways Corp. (MNTC) will operate and manage SCTEX for the next 33 years.

Hospitals - MPIC is eyeing to have a nationwide network of 15 hospitals in the next five years and a total of at least 5,000 hospital beds which is in line with the company's P10-B goal by 2016. The group is currently the largest hospital operator in the country with 1,800 bed capacity.

MPIC just recently bought 842,454,380 common shares or 43.5% stake of Asian Hospital, Inc. Asian Hospital is the first major private hospital with tertiary care facilities in southern Luzon. It has a 217-bed capacity and stands on a 17,258 square meter campus.

MPIC is also in the talks with Capitol Medical Center (CMC) which has a 300 bed capacity. CMC is one of the leading and premier medical institutions in Quezon City with more than three decades of delivering quality health care assistance. 

The 5 other hospitals that MPIC controls are: Makati Medical Center, Our Lady of Lourdes Hospital in Sta. Mesa, Riverside Medical Center in Bacolod, Cardinal Santos Medical Center in San Juan, and Davao Doctors Hospital in Mindanao.

MPIC is also eyeing hospitals at Northern Luzon, Central Luzon, Southern Luzon, Western Visayas, Central Visayas, Northern Mindanao, and Western Mindanao.

Core Income - MPI earned P5.1B in 2011 exceeding their P5B forecast. MPTC pushed MPI's profit up because of the strong demand. MPTC earned P1.48B in 2011. Earnings beat estimates because of the low operating expenses and the high earnings contribution from its 46% owned Tollway Management Corporation. MPI earned more than the forecast despite the unmet expectations from Maynilad and Meralco.

For 2012, MPI sets P23.2B budget. P11.9B will be used for Meralco, P8.4B for Maynilad, P1.8B for the hospital group, and P1.1B for the tollways.

MPI has a face value of P4.67.

However, MPI has a little cause of concern (at least short term) because of the gap up. Gap ups are normally being filled thus the ideal entry point is when the gap is being filled.

But since MPI has posted very strong fundamentals, it may continue its trek up. Notice that the closing price is also at the short trend resistance. If it breaks past its resistance, it is most likely to surge. If not, the gap may be filled.

Long term, this is a gem.

Stock Pick: GREEN

Before going down to what GREEN has in store, let us first give a little background about this company because most traders probably aren't familiar with this one. Greenergy Holdings Inc. or GREEN, formerly known as MUSX Corp. is a listed renewable energy firm led by businessman Andrew Tiu.

The company used to create, design, develop, and manufacture semiconductors until it became a holding company. Though GREEN's semiconductor business remained under it's umbrella name Music Semiconductors Coroporation or MUSX Corporation, it started to venture and focus to the field of renewable energy in the latter part of 2010. In June 22, 2011, SEC approved the company's proposal to change its name (MUSX) to the current one (GREEN).

GREEN is considered as a third liner stock. This stock lacks volatility and volume but it may change soon. Earthright Holdings, the parent firm of listed AgriNurture Inc., bought a total of 250 billion GREEN shares for P250M at P0.01 per share via private placement. Greenergy's president and chief executive Andrew Tiu owns Earthright and AgriNurture, Inc. The private placement increased GREEN's capital stock from P1B to P2B.

Apart from the private placement, Greenergy are also in talks for a possible purchase of a Taiwanese renewable energy firm. GREEN said in a PSE filing last Thursday (Feb. 23, 2012) that is board approved a plan to enter into negotiations with Grateful Strategic Consultants Co., a company that operates two biomass plants in Taiwan, for a possible acquisition.

Coincidentally, the general manager of the Taiwanese firm, General Manager Chung Ming Yang, is also a director in AgiNurture, Inc. which is owned by Tiu.

Apart from the private placement and the possible acquisition of the Taiwanese firm, Greenergy is also planning to put up at least 1,000 MW (megawatts) of wind power facilities in the country in the next 10 years and is said that will prioritize spending of up to $200M on wind energy.

Other than its plans on wind energy, Greenergy also looks forward to do projects on biomass, geothermal power, solar power, and hydroelectric power.

Greenergy also had a recent joint agreement with Chinese firm Tianjin Tianabao Investment and Development Corp. to put up renewable energy projects.

The chart below shows GREEN's price action since it changed its name from MUSX.

The chart suggests some strength. Here's why:

1.) Its SMA1 (32-day SMA) is moving fast and higher from the other SMAs (SMA2 at 65 days and SMA3 at 130 days). If a shorter SMA moves higher than the longer SMA, it indicates strength. 

2.) Though GREEN's price may look like moving inside a channel, price at 0.12 is well supported and became GREEN's immediate value. Notice how many times did it open below 0.12 but it still managed to close at 0.12. The surge from 0.11 to as high as 0.15 may have been prompted by the rumor about the possible acquisitions and the private placement.

3.) Since the surge during the first week of February, the resistance at 0.12 became its support. If you played GREEN during these times, you could have pocketed instant 8.33% everyday by buying GREEN at 0.12 and posting immediately at 0.13.

4.) Because of the news, GREEN is now a fundamentally sound stock. GREEN may have consolidated and needs a catalyst for it to surge again. However, since the news is already out, we could expect for GREEN and Andrew Tiu to release disclosures from time to time particularly regarding their acquisition in Taiwan or their planned projects.

At it's current price at 0.13, it's immediate TP could be its high at 0.15. That is some 15.38% gain.

Last Feb. 24, 2012, GREEN's latest trading day, it finished with only 54 trades for a total of 272,900,000 shares or only 4.27% of its outstanding shares. ATR Kim Eng bought 72,000,000 shares for a total of P936,000 and sold none. ATR Kim Eng also ate up the shares when the day closed which meant that such broker may have been positioning itself for a possible price surge.

Analysis:

GREEN is currently at 0.13 which could possibly be its new support, the same thing that happened to 0.12. MACD is showing some reversal and may cross. A cross between a shorter moving average (blue line) going up the longer moving average (orange line) indicates strength. RSI also crossed its resistance which is another indicator of strength. However, its RSI must break past 55. Right now, its RSI is at 54.59.

MBT: Who will win, resistance or support?

MBT is one of the best performing stocks in the financial and banking sector. In fact, it is one of the big reasons why the financial sector has been doing exemplary well this year. Below is MBT's long term chart.

MBT is currently at its long term resistance which theoretically suggests that MBT will go back down. Below is MBT's short term chart which suggests a different thing.

MBT is currently on its short term uptrend support which, again theoretically, suggests that MBT should bounce and continue to go back up. Because of the strong momentum that it has gained and considering the strength of the financial sector and even the whole index, MBT has a greater chance of bouncing back up.

However, it's MACD and RSI are suggesting some weakness which may make the long term trend resistance more significant than its short term trend.

Citiseconline has set a face value of 108 for MBT which is 30% away from its current price at 83.15.

Stocks has been breaking all time highs this year and MBT might just do the same. Three possibilities: [1] MBT will simply break it's long term resistance, [2] MBT will consolidate before breaking out, or [3] MBT may sink lower giving more buying opportunities.

PSEI: Correction Bound?

The Philippine Stock Market Index has been stellar since 2012 stepped in. The index has gone up from a little over 4300 after 2011 to as high as 4950 (as of this writing) or roughly 14% in less than 2 months. We are officially in a bull market. A bull market is a market condition wherein almost everybody is a genius, even the beginners. Almost all the stocks you buy go up if given some time resulting to hefty gains.

However, looking at it short term, the index may go lower for a few days (which is quite rare for 2012).

The chart above shows that the index, which is currently at 4950, is near its possible psychological resistance at 5000. It is also inside an uptrend channel which pegs its resistance at 5000.

However, PSE's RSI is still far from overbought which may, just may, push it higher past 5000.

Whether PSE corrects at 5000 or will break past it, it doesn't matter. Oil, mining, the financial sector, real estate, and everybody's new favorite, the basuras are doing more than just fine, as well as other sectors. This bull run has a long way to go because this has been the long overdue run last year (Japan tsunami, chaos in the middle east, European debt crisis, who cares about Europe especially Greece these days by the way? haha!) and companies in the Philippines has been so fundamentally excellent. Prices will continue to go up so let's enjoy the feeling of being a genius while it lasts. haha!

You can disregard the index but if you want a more better return, consider trading with the index's momentum.

FLI: Ready to fly?

FLI is a stock worth looking at. The chart below shows that FLI is currently resting near its channel resistance which if broken may push FLI to go up fast.

Will FLI break past its resistance or breakdown and head back down? In my opinion, FLI may break it. It's MACD and RSI are suggesting that FLI has a good potential of going back up. RSI is far from overbought which, should buying will start, indicate that there is a very huge room for growth.

FLI is fundamentally rich as well. A week or two ago, Filinvest reported different projects worth P5.2 billion in different major cities. With that being said, we can expect FLI to have a series of developments and projects in the years to come.

NI and ORE

The 2-day massive sell down has brought most stocks down. Corrections are healthy and are always a part of the market movement. The good thing, what goes down always comes back up.

Majority of the stocks are on their bargain prices and after days, and even weeks, of bullishness, most of these stocks have retraced and are soon bound to go back up.

ORE and NI have shown great potential to rise. On the first chart below, ORE is currently resting on its channel support at 5. How strong is the support? ORE's low for the day was 5 signifying that such support is strong.

Hyped to make it to 10, ORE is poised to give nearly 100% return. Fundamentally, the ASM is scheduled on September 15 and prices are expected to rise before the said date.

Below is the chart of NI. NI bounced at 50% Fibonacci at 3.67.

Fundamentally, NI is being prompted by the anticipation of a "big company" coming in. Because NI bought a part of ORE, both NI and ORE might go hand in hand together.

Both NI and ORE are poised to make it to 10 but the question is who makes it first. As far as the channel and Fibonacci are concerned, ORE is a sell at the 7 or even 8 levels while NI may breach 4 once again in a very short period of time.

EDC: Soon to Rise Again?

EDC's chart suggest that it may once again regain some bullish momentum. In the first chart (below), EDC's price is currently resting at 23.6% Fibonacci in more than a 2 year span. Though 23.6% Fib isn't considered as a major support compared to 38.2%, 50%, and 61.8%, in some cases, price action bounce at 23.6% Fib. Should this support hold, EDC may head back to its previous high at a little over than P7.

The second chart below shows that EDC's 2-year 23.6% Fib is currently at its 1-year 50% Fib which is considered as a major support (encircled in yellow). With two Fibonacci ratios hitting the same price, this further solidifies EDC's chances of resuming an uptrend.

But some caution should be exercised. EDC's RSI and MACD suggests that it is a little far from being bullish. EDC's RSI is oversold which could mean two different things: [1] Traders/investors have lost interest/confidence in this stock thus selling and getting rid of it (probably for the mean time), or, in the positive note, [2] Should EDC gain momentum, there is a very high upside because of the availability of shares.

Fundamentally, EDC incurred losses amounting to P1.3B upon shutting down its Northern Negros Geothermal Power (NNGP) but made it up by bagging tax breaks from two geothermal power projects worth P3.91B.

Indicators suggest that EDC is bearish as of the moment but it may rebound quickly and be bullish in an instant. Confirmation in the price action is needed to minimize the risk. Brokers currently having heavy loads of EDC from August 17 to August 22 are BDO Securities, Macquarie Securities, Abacus Securities, and Angping and Associates (to name a few).

Megaworld: Mega-rise bound?

Megaworld (MEG) has been a megastock midyear 2010 after it's meteoric rise from less than P1.2 to over P2.8 in just 6 months, talking about some 133% gain in just half a year span. Apparently, MEG has somewhat lost some steam in 2011, range trading between the P2-P2.4 levels before finally breaching P2 and head down to as low as P1.8.

Though MEG has exhibited some bearish characteristics, significant moohlah can still be earned from this stock and in fact, it may once again gain it's bullishness that it once had.

The chart below shows MEG's trading channel for the past 4 months.

What's significant about MEG's chart is its support. It's price bounced thrice (as of the moment) upon hitting its support indicating that support is strong and reliable enough. Should MEG exclusively follow such trend, an entry price of less than P1.8 is ideal, preferably 1.75 or lower. MEG's MACD indicator is also indicating some bullishness. MACD is a trend indicator signifying how strong (either bullish or bearish) a trend is.

Fundamentally, MEG has reported 70% increase in earnings to P15.75B in the first half of 2011 in comparison to the same period last year and it's net income increased by 131% to P5.16B including a P2B non-recurring gain from sale of AGI shares of stock. MEG's strong performance was backed by strong sales of residence projects such as Newport City, McKinley West, and McKinley Hill, as well as strong leasing income from it's BPO and retail portfolio.

With an entry price of P1.75 soon (hopefully) to be hit by September, MEG can rise to as high as 2.15 as far as the channel is concerned. We are looking at a conservative near 25% gain. Not really bad to swing trade.

Nihao Mineral Resources International (NI): Time To Shine Once Again?

Nihao Mineral Resources International (NI) is one of the most loved and hated stocks last year. After hitting more than P8 late in 2009, NI has gone downhill leaving many traders trapped and forced many others to cut their losses.

However, NI is showing some signs of life and opportunities to win some love back. The chart below is NI's 6-year uptrend support wherein it suggests that its price is currently hovering above such support. There is also a potential inverted head and shoulder formation coming and should such pattern come into a reality, NI is bound for some significant rebound. A target price of P4 is ideal for the inverted head and shoulder.

This second chart shows NI's price action for the past 3 months. NI has found a resistance at P2.50 and is out to challenge it once again.

This last chart shows that NI has been gaining momentum as it has risen for the past 3 days and its RSI (encircled in green) is showing that there is some buying pressure on NI.

NI's momentum is not yet significant but is worth looking at. Personally, I think that it is a good buying opportunity for NI.

Personal Disclosure: Bought some NI @ P2.27

PX Poised To Give Its High Another Run

The Manny Pangilinan led Philex Mining (PX) may hit another high soon. The charts below suggest that PX is setting itself up for another bullish run and possibly break its previous high set at the 27 levels.

The first chart below suggests that PX is just a few notches below its 10-month resistance to date.

The second chart however suggests that it is once again going to challenge such resistance. It has just bounced from its June-July support and may have got some new life.

PX finished strong today closing at 25.65 from 25.50 and hovering around the 25.30-25.40 mark for the most part of the day before going up. Ideally, if the support and resistance levels will hold true, PX will rise from 25.65 to a little less than 28 or probably even breach that mark. Setting a target price at 28 (maybe just a conservative amount), PX could rise by 10%-11% in just a matter of days or maybe weeks, not really quite bad.

Aside from the support and resistance levels, PX's RSI suggests that it is far from overbought thus many buyers will flock this stock in the next few days prompting this one to get so bullish. On the second chart, it's MACD (encircled in green) is starting to reverse which signifies that it will once again head back up. With both RSI and MACD considered, there is a good chance that PX will break such resistance (27.80 to 28 levels). If such resistance is broken, PX is going to uncharted waters where history suggests is a territory where stocks phenomenally go high. Setting a target price of around P35 or a gain of more than 20% is still realistic.

PX is fundamentally rich as well. Philex's subsidiary Silangan Mindanao Mining Co. just bagged tax breaks in its P49B project in Surigao del Norte. The said project can generate 2,592 jobs upon its operation by 2017 that covers 2,880 hectares of land and estimated to contain 393 million metric tons of ore which will have an estimated mine life of 36 years.

Possible Superstars in the Properties Sector

The PSE Properties Sector has been moving sideways between the 1400 and 1600 levels for the past 10 months. Now that such sector is nearing 1600 once again, there is a good chance that such resistance will be broken. In order to do that, stocks in the properties sector must do well, just like how the mining and oil sector is doing in line with the continuous rise in the oil price.

Here are two technically rich stocks that might propel the properties sector to break the 1600 mark and possible build some momentum and rise significantly.

Ayala Land Inc. (ALI)

The chart below shows that ALI has just broken out its 10 month resistance. With its RSI suggesting that it is still far from being overbought and the fundamentals that the properties sector has got recently, it won't be surprising to see ALI go up.

If ALI's price action moves up, it may encounter resistances at 17, 17.50, and around 18.20. With its current price at 16.58, ALI presents some conservative yet possibly less risky gains.

Belle Corporation (BEL)

Whether BEL behaves extraordinarily or not, its chart still suggests a huge upside. For the past 5 1/2 months, BEL has been moving sideways inside the P4-P6 channel. With its current price at P4.70, it may ideally have some P1.30 upside or 21.67% gain potential as far as the channel is concerned. The chart below suggests that BEL has a huge gap to fill from P4.70 to P6.

BEL has been dormant lately moving sideways just between the 4.68 to 4.75 channel for the past month. However, with the huge potential and promise that the properties sector is showing, BEL may wake up real soon. Its RSI suggests that it is way too far from overbought and in fact nearing oversold thus the bulls may just push this stock up soon. BEL however might not be good for short term play but as far as potential is concerned, this is a good stock.

ALI and BEL are just a few of the many stocks that show good potential in the properties sector. With the market still focused on the mining and oil industry and with mixed emotions because of the "ghost month", it may take some time for these two to move. The properties sector is already starting to build some momentum with the fundamentals that the Philippine market is getting so this sector may have next wonder worker especially now that the mining and oil sector is getting too overbought.

Ayala Land Inc. (ALI): Breakout Bound

The chart below shows that Ayala Land Inc. (ALI) is at its 3 month resistance at 16.48. With the properties sector winning some significant market sentiment lately as evident in the price action of stocks such as FLI and VLL, ALI is bound to breakout soon.

So how confident ALI could be? ALI has been consistently rising for more than a week and yet its RSI suggests that it is not yet oversold. With the properties sector bound to breakout and ALI owning the biggest chunk on the said sector, it might push the said sector up. How ALI will do will significantly affect the properties sector.

ALI also bagged a P3.5 billion sale and lease of 7.7 hectares of state property at Negros topping rival SM Prime. The said sale is prompted to provide more jobs, improve the tourism in the province, and Negrenses will enjoy a better kind of life.

Personal Disclosure: Sold PWR for a loss due to the crappy internet connection and bought ALI at 16.42. I bought PWR at 3.05 last Thursday and should have sold it at 3.30 at Friday but failed to do so because of the lag on the broker's system. I ended up selling it at 2.98 and 2.95. Looking forward to buy more ALI if the resistance is broken.

Manila Mining (MA) to challenge 10 month resistance

I've been a fan of Manila Mining (MA) for the past week. MA just got out from its triangle and went up from 0.051 to as high as 0.063 (23.52%) in just a week. However, the chart below tells that MA is right at its 10-month resistance.

Should MA maintain its momentum and break such resistance, 0.1 would just be around the corner. With the momentum that the mining and oil sector has gained over the past months, there is a good possibility that MA will get past such resistance and continue to go north. On the downside, MA's RSI shows that it is already over the oversold level.

Fundamentally, the market sentiment towards the mining and oil sector remains very high and the price of gold continues to increase thus making MA still one of the better picks in the market today.

Personal Disclosure: Sold MA for 17.19% gain after 5 days and bought PWR for another short term play. Should MA bounce back after the correction and break such resistance, I'll get back into the MA wagon.

PSE Index: Breakout or Breakdown?

For two and a half months, the Philippine Stock Exchange Index or PSEi has been moving sideways. It hit an all time high of more than 4,450 last July 6 but went down from then on. The chart below shows that PSEi is currently resting at its past resistance. Hopefully, such resistance will turn into a support so PSEi could bounce and head back up again.

Aside from turning the resistance into a possible support, PSEi is also resting on 38.2% Fibonacci in reference to its last correction. The Relative Strength Index (RSI) is also showing some good signs as it is not overbought. However, the MACD is showing some bearish signs.

A little caution must be practiced because, despite PSEi's good technical position, the fundamentals aren't looking great. The debt crisis that the European markets are experiencing are having an impact on the global markets. The Dow Jones Index manifested such crisis by dropping 151.44 points or -1.20%. Nasdaq also dropped 57.44 points or -2.0%, while oil continues to tumble down.

Gold might push PSEi up aside from its good technical position. Gold increased by more than 6 points which might have triggered the 11% increase in LC. If gold continues to do such wonder, the mining and oil sector will remain as a safe bet for both traders and investors. The mining and oil sector is also on an uptrend.

If PSEi's technical position won't hold, it may sink to as low as 4200, its long term uptrend support, a deep dive from its current value at 4375. PSE's chart is showing some bearish divergence so there might be a good chance for it to drop.

War of Telcos: GLO vs TEL-DGTL

The PLDT (TEL)-Digitel (DGTL) merger created buzz in the stock market and in the consumer world drawing in mixed emotions and reactions. Many felt threatened now that PLDT owns more than half of the unlimited call and text pioneer in the Philippines. But is it really so? Here's my insights about the merger.

The recent TEL-DGTL merger was likened to the BDO-Equitable PCI Bank merger in 2006. When BDO bought PCI Equitable Bank in 2006, they released a statement that Equitable PCI Bank would remain and operate as a separate entity but later on became Banco de Oro Unibank and Equitable PCI Banks were slowly turned into BDO branches.

Manny Pangilinan said that Sun Cellular would retain its existing features yet many people are pessimistic and think that the unlimited call and text will be gone soon.

I don't think that the unlimited call and text features of Sun Cellular will be phased out in the merger because such feature is the lifeline of Sun Cellular and the same feature will further boost PLDT's subscriber population. Though in a sense that a huge part of the competition has been killed, Globe still owns a significant part of the market which I believe is strong enough to compete with TEL and DGTL. PLDT has to keep its competitiveness up against Globe and the unlimited call and text feature is an edge.

What's in it for Globe? Globe (GLO) gained market sentiment after the merger. Two days after the merger, TEL's stocks decreased (probably because of profit taking) while DGTL's continued to sink while GLO's still went up.

What prompted the market sentiment for GLO? In my opinion, GLO is the only company that could neutralize the monopoly of PLDT as of the moment. Globe has approximately 25 million subscribers, quite significant in comparison to PLDT's 41 million and Digitel's 16 million. Though the merger made PLDT own the lion's share of the pie at 57 million, the market sentiment is leaning towards Globe for now and if they can capitalize on the panic that the merger has created, they could give PLDT a run for their money.

Fundamentally, I am staying away from telco stocks right now. First, I find TEL and GLO expensive. Expensive in a sense that for an amount of 2400 or 900 I can buy more shares from different stocks at a cheaper price and for an equal potential. As soon as the telco fever is over, I'm confident that other stocks will follow. Second, other than the merger, telco companies doesn't have much fundamentals. There hasn't been any technological advancements which makes me think that the telco sector is stagnating as of the moment.

PSEi Finally Breaks 4000: The Good, The Bad, and The Ugly

The long wait is finally over. The Philippine Stock Exchange Index (PHISIX) finally broke the 4000 mark after the bearish run to start the year and a very long consolidation state. Experts, experienced traders and investors, and analysts predicted that PHISIX will resume an uptrend this March but unfortunately, events in Egypt, Libya, and Japan made it hard for PHISIX to move forward. So the forecasts still made it in time, it's March 30 and PHISIX gained 116.51 points to finish at 4023.74.

PLDT's (TEL) acquisition of 51.55% of Digitel (DGTL) shares prompted the push beyond 4000. After the news of the acquisition was confirmed, TEL rose by 320 points to finish at 2356 while (surprisingly), rival Globe Telecom (GLO) gained 96 points to finish at 842. The telco fever has sent the PHISIX skyrocketing.

The Good

PHISIX might have finally built enough momentum for another bull run. Some experts say that PHISIX could break its previous high at around 4400 and even go as high as 4600 or 4700 before 2011 ends. It's something good to look forward to, at least we're being optimistic about the market.

Because of the momentum, other stocks will most likely go up after the telco fever subsides. TEL might go even higher while GLO might go lower. I'm staying away from these two stocks because I find these two a bit expensive. I can buy more stocks for 2400 and 845 with equal potential as TEL and GLO. More shares for equal potential, the better. Look out for SMC, EDC, AC, AP, JFC, SCC, and probably even JGS (just to name a few).

And lastly, now that the PHISIX is starting to go up, expect other investments to go up as well. To those who are investing in mutual funds, this is the entry that you've been looking for: cheap NAVPS and more shares bought. Other than mutual funds, this is also a great opportunity to start investing or adding more in UITFs, bonds, and other equities.

The Bad

The chart below shows that PHISIX is forming a symmetrical triangle.

Though symmetrical triangles are neutral in nature, it also signifies that the market is undecided where to go next. The price action might go either way (up or down) and it is best to wait for confirmation before coming up with a decision.

The Ugly

This one has nothing to do with the price action but more on the consumer side. Now that PLDT owns a majority stake of the unlimited call and text pioneer in the Philippines, we might expect higher rates sooner or later. Though PLDT said that don't intend to cut Sun Cellular's services, I remain skeptical in the long run. The merger has not only killed the competition but made PLDT the majority share holder of DGTL further expanding its telecom empire. On a business sense, it was a win-win situation for both Pangilinan and Gokongwei as Pangilinan now owns more than half of Digitel while Gokongwei gets a part of PLDT. With lesser competition (and Globe not a fan of unlimited calls and texts), expect subscribers to carry heavier rates soon.

Summing it up, I'm very much optimistic about PHISIX. Rather than following the price action of TEL and GLO, it is much better to accumulate shares on stocks that are taking short term dips. These stocks will fuel PHISIX's continual growth and they are way cheaper than TEL and GLO.

Fibonacci Analysis: The Long Overdue Bull Run

Apparently, the much awaited uptrend is already long overdue. Bad news comes one after another which significantly affects PHISIX. Nevertheless, the index has shown signs of life as it remained in the consolidation stage despite the negative turn of events. Quite an achievement so to speak.

I ran a Fibonacci analysis on some stocks (including PHISIX) and found some interesting set ups. The chart below shows that PHISIX is just hovering above 23.6% of Fibonacci which is at 3800. This is applicable to those who are investing in mutual funds and UITFs since these financial entities are strongly affected by the stock market. As soon as PHISIX hits 3800 and bounces back up, it's a good entry point.

The charts below show some good stocks positions for several companies.

PCOR: Many are scared of PCOR because of the dip that it took for the last two months. The chart below shows that PCOR went up as it hit the 50% mark. 50% in Fib is quite strong (in my opinion). It is a little premature to take PCOR but this is definitely worth the look.

JGS: JGS hit the 23.6% mark at 21.5 and went back up. Confirmation is needed as usual to minimize the risk. The chart also shows that 21.5 is a resistance that might turn into a support if JGS would bounce back up. Other than Fibonacci, JGS is also resting on its uptrend support.

JFC: JFC is nearing to hit the 23.6% resistance at 85. If JFC will break it, it will indicate some strong bullish momentum. On a short term perspective, JFC is consolidating. It's undecided as to where to go so again, waiting for a confirmation would be wise before coming up with a decision.

EDC: EDC hit 23.6% at P6. Considering that this has some bullish momentum, this would most likely bounce back up. EDC got some good reviews for the year so I think that at P6, it is a good buy.

AC: Just like JFC, AC is up to challenge the 23.6% resistance at 360. AC was hovering around the 355-360 mark recently and should it get past 360, it will signal some strong buying.

Fibonacci Retracements only suggest where the price would possibly go next but doesn't exactly tell where it would head. It still needs confirmation of price action, other indicators, and fundamentals to further boost its reliability. Nevertheless, I remain optimistic on these stocks for 2011 and the bulls are just waiting at the corner.

The Rainbow After The Rain

After some selling pressure for more than a month, the Philippine Stock Exchange Index (PHISIX or PSEi) is now into the consolidation stage giving signs of a possible uptrend real soon. Some stocks have already broke loose from their short term (in the 1 month downtrend) resistance, some going into consolidation as well while some turned such resistance into supports. However, there are some that continued to go down.

Since the valuations went down for the past weeks, this is a very good time to buy as the much anticipated uptrend is just around the corner. PHISIX is flirting with it's 3900 resistance and as soon as it gains some serious bullish momentum and break such resistance, expect a good number of stocks and PHISIX as well to soar high.

The list entails a lot of Fibonacci retracements and Elliott Wave Theory wave 5 potentials. Elliott Wave Theory's wave 5 is an uptrend or in other words, the value of a particular stock continuing to go up. Fibonacci on the other hand notes some precalculated support/resistance levels that are found to hold true (not all the time but most of the time). If a price hits a Fibonacci support/resistance, it is most likely to reverse.

I have kept a handful of companies in my watch list and picked a few with some really good potential to invest in for at least this year. Most of the MACDs and RSI of such companies are positive indicating some good points of entry. Here's my list:

AC - For the past weeks, AC dropped from around 403 to just a little over 320. For the month of March, AC gained buying pressure as it rose to almost 355. In a two-year reference, AC is hovering above it's two year support and might possibly head into wave 5 of Elliott Wave Theory. My favorite part is seeing it bounce at 38.2% of Fibonacci since January of 2009.

AP - From mid-October of 2008 until this day, AP is on a very strong uptrend gradually yet consistently rising from barely a peso to as high as 35. However, a certain support (from around September of 2009) says that AP's support has turned into a resistance which it is currently challenging right now. Fibonacci suggests that AP might have bounced at 23.6% already (which is a minor support in Fibonacci). As of now, there is no clear indication as to where AP would head next but as soon as it breaks through its resistance at around 32, it's going to be a good buy.

DMC - Technicals are really looking so good for DMC. First, it is resting on a very solid uptrend support and just bounced recently at around 33-34. Second, in a two year span, DMC's position for an Elliott Wave Theory wave 5 is looking really good. For the entry, DMC just broke it's resistance at around 37. It is going to be on its way to challenge its previous high at 40. I'm very optimistic about this one.

JGS - JGS broke its uptrend support and went sideways for the past 2 1/2 months. However, JGS is forming an ascending triangle and should the resistance at around 19.8 will be broken, JGS could go high fast. In a 1 1/2 years span, JGS could enter Elliott Wave Theory wave 5. It needs some confirmation though as MACD is showing selling might just be ahead. JGS has already hit its 38.2% Fibonacci support in a two year reference.

MBT - Another Elliott Wave Theory wave 5 candidate. However, MBT's support for the last 2 years has become its resistance. If it could break its resistance at 72, it will be on its way up, wave 5 might come after all. It is also resting on its 38.2% Fibonacci support. A bounce is more likely.

MEG - From April 2009, MEG is an eye candy for Fibonacci players. MEG is well resting on its 38.2% support, consolidated, and resumed an uptrend. MEG also just bounced from its 2 year uptrend support, quite a solid support that is.

RCB - In nearly two years, RCB just bounced from its 23.6% Fibonacci support. However, on the same span of time, it has just gone below its uptrend support and challenges to break through it. Should RCB break such resistance and turn it back into a support, it will be on its way up.

SCC - Not really much to say about this one. It's uptrend support is very strong. One of my best picks for the year.

SMC - After a strong uptrend, SMC is consolidating as of the moment. Considering all the fundamentals that this company has, SMC remains a strong one for 2011. Confirmation is needed for entry. From the foot of its uptrend late in 2010, SMC is on the 23.6% support of Fibonacci at roughly P160.

SMPH - As of this writing, SMPH just broke out from its downtrend from December of 2010. A support at 10 is somewhat found but as far as Fibonacci is concerned, it might fall down as it hits the 23.6% ceiling. However, in a two year span, SMPH might head into Elliott Wave Theory wave 5. Quite worth looking at.

However, these are all just based on my analysis of the charts and doesn't include fundamentals yet. Always keep in mind that the most important thing in all of these is the price action. Technicals are just signs of the possible behavior and to project the possibility of the direction of the price. If things won't go as expected, bail out. Your decisions will never be right all the time. And lastly, cut hoping (that the price will go up anytime soon). Hoping can lead to false hopes.