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.

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.

The Potential of PX and JGS

Philex Mining (PX) and JG Summit Holdings (JGS) have caught my attention as their graphs looked promising as of the moment. Both PX and JGS are at their current trend supports and with the talks of the market getting bullish yet again this coming February or March, it seems that both will be strengthening their supports and continue the trend.

Here are the graphs of PX and JGS. As of this writing PX is at 15.2 and JGS is at 19 flat.

Philex Mining (PX)

JG Summit Holdings (JGS)

PX has grown from nearly P2 in 2004 to roughly P10 to start 2011, a growth of about 400%. JGS on the other hand rose from barely a peso in 2008 to about P20 to start 2011, a whooping 2000% growth in just roughly 2 years. Should the trend continue, both PX and JGS offers some really good potential.

For long term investors and those who are planning to invest in the stock market, these two are worth some look.

*Please bear with the graphs. I will get better in time. =)