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.

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.

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.