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: 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.

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.

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.

Rainbow After the Rain

The crisis that has hit Europe, Greece in particular, so far has caused both reasonable and exaggerated fear. Reasonable in a sense that the markets are bound to go down in the next few weeks or even months not until the said crisis is resolved and exaggerated in a sense that some traders/investors are making it look worse than it seem. Either way, major markets are going down and not even the good economic state of the United States can spare it.

Patience is indeed a virtue and on an investors' point of view, the rewards that may follow the recession may not just be great but spectacular. Let's see how did some blue chip companies do after the 2008 financial crisis.

DMC - For as low as P2 per share in December 2008, DMC went up to as high as P48 in May 2011 or some 2400% increase in 2.5 years. DMC was around its previous high of P14 before it went down to lower the P2 levels.

JGS - JGS was around P2 per share in December 2008 and went up to as high as P28 in May 2011 or 1400% increase in 2.5 years. JGS was at a previous high of around P15 before it went down to P2.

DMC and JGS are just some of the stocks that have worked wonders when the market recovered. What does this say? Blue chips are bound to get cheap with the upcoming recession (if Europe can't solve the Greece puzzle). Some stocks that are have great potential are EDC, MEG, mining sector stocks such as PX, NI, ORE, AGP, DIZ, LC, and MA, the financial sector stocks, and probably SMC, and CEB.

However, while waiting for the storm to calm down, penny stocks are getting some attention. 2011 was filled with mixed emotions in the market but these penny stocks has just been plain spectacular

BHI - From around 0.065 in January 2011 to as high as 0.51 mid September, BHI has already went up to as high as 685% in just 9 months before it went down after the news broke out that it is going to be suspended for 3 months. At around 0.2, BHI is somewhat cheap and it will go back up in just a matter of time.

MA - From 0.022 in January to as high as 0.077 at late August, MA has gone up to as high as 250% in just a matter of 9 months. Thanks to the strong mining sector that has pushed this one up along with LC. MA/B has basically the same growth as MA.

LC - A leap from 0.4 to 1.8, LC has gone up by 350% in just a matter of roughly 9 months. A strong gold plus the Goldfields deal pushed LC up along with LC/B and pulled MA and MA/B along with it.

ZHI - Kinda late as it started its run just on July but it went up by more or less 500% in just a matter of weeks. After the retracement, ZHI has started to show some life once again by going up from 0.6 to nearly 1, roughly 66% in two or three weeks.

What are the key points here?

1.) With a very uncertain market, traders/investors are banking on "cheap" stocks such as penny stocks. Putting aside P/E ratios, debt-to-equity ratios, and other fundamental indicators, by cheap we mean a huge upside potential. Penny stocks can give a large number of shares which in return, may result to bigger earnings (or losses) per tick. Penny stocks come to life when the market is bad and while waiting for the market to recover and the blue chips to come back to life, rest on penny stocks. One stock that may follow suit is WPI.

2.) As soon as the market recovers, shift to blue chip companies. Blues move faster in a very good economy because they are the barometers of the economy. Though penny stocks may still continue to do good, blue chips move faster. Just refer to DMC and JGS's performance after 2008.

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.

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.

Manila Mining (MA): Breakout Bound?

The long wait for Manila Mining's (MA) run could finally be over. MA went up by 0.0050 points or 9.62% to close at P0.057 and reach a new high. MA has already broken out from its triangle formed in the past two months and has breached its uptrend resistance as shown in the chart below.

Now that MA is already in an uncharted territory, anything is possible. LC and PWR were phenomenal after making new highs with LC roughly doubled in just two months while PWR nearing 600% gain in just a week! With no resistances to stop MA, it could follow LC and PWR's footsteps and could be the next wonder worker in the days or weeks to come.

Fundamentally, gold continues to do very well internationally which puts the ball back into the mining sector. Gold went up by 2.90 points in the global market despite of the heavy selling that sent the stocks down to a new low for July. Dow Jones Index (DJI), S&P 500, and Nasdaq all went down while gold and oil remained positive.

The positive sentiment towards the oil and mining sector could push MA (and other stocks in the sector) up. A little caution must be exercised though as MA's RSI is indicating that it is already a little overbought and correction or selling might just be around the corner.

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.

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.

BEL: Double Bottom?

The chart below shows that BEL (Belle Corporation) is in a potential double bottom. BEL was one of the many companies that surged late in 2010 as it went up from a little below P2.50 last November of 2010 to as high as P6.30 in mid January of 2011 before starting to sink to less than P5 in February.

However as shown in the chart, BEL gained some momentum at around P4.70ish, went back up to reach near P5.20 before going back down to around P4.70. Since then, BEL gradually picked up some uptrend momentum.

What's interesting in the chart is that the P4.70 level was an uptrend resistance before the double bottom (hopefully) formed. Around January 6, 2011, BEL hit the P4.70 level before bouncing back up for one more run before losing some strength.

Should the double bottom hold, BEL could continue its uptrend run. The good catch? BEL is just hovering around the P5 mark, quite cheap.

I'm optimistic about BEL (I'm always optimistic anyway) but a confirmation would be wise. The double bottom might not hold true. Better be safe than sorry.

MER: Shining Bright

The chart below shows that MER (Meralco) is getting near it's 2-year uptrend support at around the 213-220 range. For the month of February, MER found a strong support at around the 216-220 range but always manages to finish a higher high from 235 to around 240 and its resistance forming a slope signaling an uptrend.

If worse comes to worse and the technicals won't hold true, MER could fall back down to its 5-year uptrend support at around 160.

Fundamentally, MER is a good long term buy. MER has significantly developed under the leadership of Manny Pangilinan in energy production, distribution, and customer care. MER is looking forward for further and massive developments in energy production and distribution in the next 5 years.

To start off, MER is going to put up a pioneering jet fuel/diesel/natural gas plant in Calamba, Laguna set to start on the first quarter of 2012 to produce 120-150 megawatts of power. The company also aims to produce 150 megawatts in 2012, another 150 megawatts in 2013, 600 megawatts in 2014, and 300 megawatts in both 2015 and 2016. MER is also in talks with 2 to 4 groups for possible partnerships in the future and is optimistic that they can offer consumers 5 kilowatt per hour rates.

MER is dancing around the 230 levels right now which for me is a good buy. As soon as their plans will start to come into fruition, MER could go as high as 450 in the next 1 1/2 years based on Fibonacci.

SCC: Going Down?

For a little more than a year, SCC's uptrend support has been so strong. SCC's stock rose from around P40 in January of 2010 to as high as P210 (even higher) in January of 2011. The support was challenged several times yet held firm.

However the chart below signifies that SCC's uptrend support might finally give in. First, the chart shows a rising wedge formation which theoretically signals that a downtrend is coming soon. Second, SCC has breached its seemingly strong uptrend support (encircled in blue).

Though SCC is a strong one, the chart shows the market sentiment. It's price action is starting to consolidate after a gradual yet consistent rise. This could be testing a new support level or heading for a reversal (hopefully, it's the former).

On a personal note, I think that SCC is going to be one of the strong stocks as soon as PHISIX is done with consolidation and resumes an uptrend. The Mining and Oil index is projected to do very good in 2011 and SCC is the leading company in the said index.

SCC's charts shows two things: [1] That it is a very strong stock considering its uptrend support (which was breached possibly because of consolidation of the market), and [2] That it might finally break the support and go for a nosedive. How deep? Nobody knows. SCC could go as low as P160, P140, or P110 based on Fibonacci's 38.2%, 50%, and 61.8%.

A bold prediction on SCC: As soon as this gets through the previous uptrend support which is at around the P210-P215 range, it will gain momentum and rise fast. Right now, I think that it would just be wise to buy on rallies and sell on dips (or sell on resistance).

DMC: Feels Really Good to be Home

This is the right time to do some stocks window shopping. The market is in the consolidation state for almost the whole first quarter and a correction is just waiting around the corner. While looking around for some potentially good stocks, I have stumbled upon DMC.

The chart below shows that DMC is getting near it's two year uptrend support at around 30ish. If the support holds, DMC is bound for another strong uptrend. In approximately 2 years time, DMC rose from barely a peso to as high as P35 or 3500%. Should such slope and momentum continue, DMC could go as high as P50 or even P55.

The chart below shows where DMC stands in the Elliott Wave Theory. Though not as steep as it should be, I think that DMC is already at wave 4 and wave 5 is coming up soon. DMC is also at its 23.6% Fibonacci support level. Though 23.6% doesn't hold strong in comparison to 38.2%, 50%, and 61.8%, it is still a valid support. Considering that DMC is in consolidation and it's short support holding quite well, I think that makes 23.6% valid.

Fundamental wise, DMC has just bagged in 3 contracts for 2011 worth billions. This news actually prompted me to give DMC a look.

I still don't think that DMC's fundamentals is that strong to push it back up. However DMC is really looking good technically and just like most of the stocks that I'm looking at, a few more fundamentals are needed to trigger an uptrend.

Megawide: Developing Properties, Developing Potential

Megawide Construction Corp. is the first company to go public this 2011. Just in case you're not familiar with what this company is, Megawide is one of the biggest and fastest growing engineering and construction firms in the Philippines today. Megawide accounts for 70% of the residential condominium projects of the Sy family's SMDC. Other than SM's projects, Megawide's clients include Belle Corporation, Antel Group, Suyen Corp. (owner of Bench), Prince Jun Development Group, Bellevue Hotel Group, Keppelland Realty, Malate Bayview Development Group, and Goldland Properties and Dynamic Realty.

In it's move to go public, Megawide opened 34% of its company's total stock to the public. In it's opening day, Megawide (listed as MWIDE in PSE) offered P7.84 per share.

Being it's top client, Henry Sy's SM bought 64% of MWIDE's total shares leaving only 36% left for public consumption. SM is having several construction plans for 2011 all over the Philippines which means more projects for Megawide. Never mind Sy and SM owning part of Megawide to cut costs in their projects, Megawide is going to have a very busy year and that's all that matters.

Rumors also has it that SMC plans to buy into MWIDE. SMC's diversification plans fits well with MWIDE as SMC is planning to get into PPP (public private partnerships) this year. Should SMC get into MWIDE sooner or later, that would further boost MWIDE up. SMDC and SMC are strong enough to lift MWIDE up. Aside from SMC, Phinma and Ben Chan of Bench are also rumored to take part of MWIDE.

Lastly, there are 11 PPP reported to start this year for a rough total of $200 billion. Being one of the biggest construction and engineering firms, expect Megawide to get into the negotiation and contract talks in at least one of these 11 projects.

Megawide was established in 1997 by De La Salle University civil engineers Michael Cosiquien and Edgar Saavedra and became a P2 billion company since then and accounts for 20% of high rise residential property construction business. Turnover is expected to double to P4 billion this year.

My personal note is that I think that MWIDE is still undervalued considering that SM bought more than half of it's shares. If SMC would push through in acquiring shares and with their PPP plans, MWIDE could be worth a lot more than its IPO price.

SMC: Fundamentally Sound in 2011

San Miguel Corporation (listed SMC) is one of the companies poised to have a breakout in 2011. SMC broke loose from around P80 in November of 2010 and reached highs at around P185 entering January 2011. The sudden rise was triggered by the reports that SMC is going to invest $40 million in Indophil Resources NL, owner of 37.5% stake in the untapped gold and copper deposit in Asia and part of the $52 billion Tampakan copper-gold project in South Cotabato and the recent acquisition of petroleum heavyweight Petron.

However, SMC has somewhat found a resistance at around P180 as shown in the chart below. For a company that has a lot of fundamentals, what could possibly be holding SMC back from breaking out? SMC's sharp rise might have prompted several firms and individuals to take their profits. The sell out has brought PHISIX down and several investors have taken their money to more stable economies such as the United States and Europe, invested them in stronger currencies or indices.

As far as SMC is concerned, their diversifying plans have further boosted the value of their stocks. Other than the Tampakan project, SMC may also challenge the Pangilinan-led Metro Pacific Investment Corp.'s offer to buy the government's stake in Metro Rail Transit (MRT 3) confirmed by SMC president Ramon S. Ang. SMC is also in talks with Citra Lamtoro Gong Persada and Star Tollway Corp. for a possible organization and establishment of a corporation that will consolidate and undertake toll-road operations and participate in infrastructure projects initiated by the government through it's PPP (public private partnerships) program.

In terms of revenues, SMC eyes a revenue of P1 trillion by 2016. The company made P230 billion in 2010 and projects P530 billion in revenues in 2011. Out of the projected P530 billion revenue, only P214 billion are said to come from the company's traditional food and beverage businesses while the remaining sum from the new businesses, spearheaded by Petron.

Mr. Ang also announced that SMC will have its second public offering once the price of its shares goes up to P250. Ang also said that SMC's current price which is around the P175-P185 range doesn't reflect the company's real assets and worth.

As soon as the market would pick up some buying momentum and break its resistance at P180, expect SMC to go high, fast, and steep. Personally, I think that SMC could go higher than P250 even as high as P300 before 2011 ends provided that its diversification plans would come into fruition.