Ayala Land Inc. (ALI): Breakout Bound

The chart below shows that Ayala Land Inc. (ALI) is at its 3 month resistance at 16.48. With the properties sector winning some significant market sentiment lately as evident in the price action of stocks such as FLI and VLL, ALI is bound to breakout soon.

So how confident ALI could be? ALI has been consistently rising for more than a week and yet its RSI suggests that it is not yet oversold. With the properties sector bound to breakout and ALI owning the biggest chunk on the said sector, it might push the said sector up. How ALI will do will significantly affect the properties sector.

ALI also bagged a P3.5 billion sale and lease of 7.7 hectares of state property at Negros topping rival SM Prime. The said sale is prompted to provide more jobs, improve the tourism in the province, and Negrenses will enjoy a better kind of life.

Personal Disclosure: Sold PWR for a loss due to the crappy internet connection and bought ALI at 16.42. I bought PWR at 3.05 last Thursday and should have sold it at 3.30 at Friday but failed to do so because of the lag on the broker's system. I ended up selling it at 2.98 and 2.95. Looking forward to buy more ALI if the resistance is broken.

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.

War of Telcos: GLO vs TEL-DGTL

The PLDT (TEL)-Digitel (DGTL) merger created buzz in the stock market and in the consumer world drawing in mixed emotions and reactions. Many felt threatened now that PLDT owns more than half of the unlimited call and text pioneer in the Philippines. But is it really so? Here's my insights about the merger.

The recent TEL-DGTL merger was likened to the BDO-Equitable PCI Bank merger in 2006. When BDO bought PCI Equitable Bank in 2006, they released a statement that Equitable PCI Bank would remain and operate as a separate entity but later on became Banco de Oro Unibank and Equitable PCI Banks were slowly turned into BDO branches.

Manny Pangilinan said that Sun Cellular would retain its existing features yet many people are pessimistic and think that the unlimited call and text will be gone soon.

I don't think that the unlimited call and text features of Sun Cellular will be phased out in the merger because such feature is the lifeline of Sun Cellular and the same feature will further boost PLDT's subscriber population. Though in a sense that a huge part of the competition has been killed, Globe still owns a significant part of the market which I believe is strong enough to compete with TEL and DGTL. PLDT has to keep its competitiveness up against Globe and the unlimited call and text feature is an edge.

What's in it for Globe? Globe (GLO) gained market sentiment after the merger. Two days after the merger, TEL's stocks decreased (probably because of profit taking) while DGTL's continued to sink while GLO's still went up.

What prompted the market sentiment for GLO? In my opinion, GLO is the only company that could neutralize the monopoly of PLDT as of the moment. Globe has approximately 25 million subscribers, quite significant in comparison to PLDT's 41 million and Digitel's 16 million. Though the merger made PLDT own the lion's share of the pie at 57 million, the market sentiment is leaning towards Globe for now and if they can capitalize on the panic that the merger has created, they could give PLDT a run for their money.

Fundamentally, I am staying away from telco stocks right now. First, I find TEL and GLO expensive. Expensive in a sense that for an amount of 2400 or 900 I can buy more shares from different stocks at a cheaper price and for an equal potential. As soon as the telco fever is over, I'm confident that other stocks will follow. Second, other than the merger, telco companies doesn't have much fundamentals. There hasn't been any technological advancements which makes me think that the telco sector is stagnating as of the moment.

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.

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.