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

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.

MEG and SMPH wave 5 uptrend bound?

It's weekend and I've got a lot of time to review the companies on my watch list as well as look for some news to form some solid grounds on coming up with my trading and investing decisions. Looking at long term charts, MEG and SMPH are showing good room of potential to go long.

Elliot's Wave Theory (EWT) states that a stock normally goes 5 waves before changing it's course. 1, 3, and 5 going the same way while waves 2 and 4 going the opposite way.

EWT shows that SMPH have gone through waves one to four for the past year and a half going up from roughly P6 in near end of 2008 to more than P12 to near end of 2010 before slipping down to just a little over P10 as of this writing.

Supports at P10.7 and P10.5 were already hit and there is a good chance that this stock will slip further down. Confirmation is strongly recommended for this stock before entry. Personally, I think that this could go down further to P10 or maybe even more.

MEG presents a very interesting case as it could go either way. Starting with the downtrend, MEG could possibly be on it's 5th wave which is going down and should a reversal will happen, there's no other way to go but up. If we'll start wave one with the uptrend, MEG's wave 5 will be going up for a year (based from the interval of the first four waves). Either way, be it starting EWT from the downtrend or from an uptrend, it will still go up sooner or later.

MEG started from barely nothing near the start of 2009 and went all the way up to as high as near P3 in 2010 before settling down to near P2 as of this writing. Just like everything else, entry should be done best after a confirmation of the trend.

For the fractional growth of these two stocks since wave 1, MEG (computing from the uptrend) grew nearly 300% in roughly two years and a little over 200% to date while SMPH was close to 100% gain in two years and around 67% as of this writing. Not really that bad if you ask me (way better than putting money in the bank actually).

And lastly, it might be wise to make an entry when PHISIX is back on an uptrend again. Take note that we're entering for a long hold, not day or swing trade the stock.