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).

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.

2011: Go high with JGS

If you're shopping for stocks to go long for 2011, JG Summit (JGS) is definitely one of the best picks. Just in case you don't know, JG Summit is the umbrella corporation of Cebu Pacific, Universal Robina Corporation, Robinsons Land Corporation, Digitel Philippines, United Industrial Corporation, Robinsons Bank, and JG Summit Petrochemical Corp run and owned by the Gokongwei family. JGS is one of the leaders in agro-industrial and commodity food products, telecommunications, property development and hotel management, air transportation, petrochemicals, information capital and financial services, and other supplementary businesses.

Probably you've heard me fantasize about JGS for a number of times already but who won't for a company that gave a growth of roughly 2000% in less than 2 years? In fact, it went up for as high as 2500% by near end of 2010 before starting to go down slow. If you had placed P100,000 in JGS back in March of 2009, you'd be having P200 million by now!

Anyway, speaking of JGS's potential, the chart below shows that [1] JGS is resting on it's uptrend support (which is very well inclined by the way), [2] it is bound for wave 5 according to Elliott Wave Theory, and [3] MACD (encircled below) signifies buying spree is just around the corner.

Take away the complexities of the analysis and summing it up, JGS is bound for another uphill climb and based on it's performance over the past 2 years, we're talking about some serious growth. Another 2000% gain might sound too ambitious but 500-1000% or maybe lesser won't hurt either. If that won't excite you, I don't know what will.

The chart below is JGS's chart from November of 2010 until February of 2011. The first line (longer line) shows that JGS was resting on it's downtrend support from November of 2010 until around mid-January of 2011. The second line (shorter line) shows that JGS didn't return to it's support and started to go back up. JGS is starting to gain momentum and it won't be long until it will start to rise again.

According to experts and professionals, PHISIX will get back up soon and by that time, expect JGS to continue it's uptrend too.

JGS is at P19.60 right now, quite a bargain if you ask me. We still haven't heard anything from JGS yet but as soon as fundamentals could back the technicals up, it will further solidify JGS's rise.